Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on January 6, 2009

Locking Stance: LOCKING    Mortgage Bonds: +103bp

Mortgage backed securities got another boost today by all of the Fed buying, along with some freeloaders I am sure.  Besides the Fed news, some data, both market movers and other data, hit the airwaves, culminating in a mixed bag that was generally favoring mortgage bonds.

I already talked about the ISM Services Index beating expectations, and the FOMC Minutes was basically what you would have expected.  The FOMC Minutes showed the Fed afraid of deflation, negative GDP growth, and rising unemployment rates.  But other data showed housing still on edge and some sub-indexes of the ISM Services Index showed increases in, guess what?  Yep, employment, among other things.

One thing is for sure is that Bernanke stands true to his word as he and his buddy Paulson will keep throwing money into the system with no regard for the negative results that will inevitably occur.  And When Lethargic Rabbits Start Running, watch out.

What does this mean for Florida Mortgage Rates?  Volatility will continue as the Fed props the market and continues to inflate the bubble.  Eventually, the bubble will pop and mortgage rates will climb, likely very quickly.  So long as the Fed keep pumping money into the market, mortgage rates may yet move lower, but most lenders can be seen hedging already, meaning they are not passing along lower mortgage rates.

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