Florida Mortgage Rates – Evening Report

by Florida's #1 Mortgage Planner on April 21, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +25bp

As promised, I am writing a review of today’s events and what I see in the charts.  Obviously, MBS prices were higher today, breaking back above their 25-day moving average and attempting to make a solid run this time, though I continue to doubt their ability to do so.  There is a good chance we will be back in a locking mode tomorrow.

Still no major data plays available, that is until tomorrow, where we have the weekly Jobless Claims, Producer Price Index and Existing Home Sales.  Oh, and let’s not forget what will likely be the biggest player, the Treasury Auction Announcements.  I suspect that the announcements will get MBS prices heading lower again, thus sending mortgage rates higher, but we will have to see for sure.  MBA Purchase Applications were reported today and showed a 10.1% jump in purchase applications, and even a 15.8% jump in refinance applications.  That still leaves them well below where they were, though maybe things are looking up a bit. 

While today’s climb in mortgage bonds was nice, there are still the multiple resistance layers (4) that I have mentioned before, which will be very tough to break.  The 100-day MA is about to cross below the 200-day MA, and the 50-day MA continues to hold back MBS prices right now.  Even the 10-day MA has flattened out, failing to break above the 25-day MA, so there are several negative factors right there.  Stochastic indications are not signaling much at this point, but if MBS prices don’t manage to push higher tomorrow, a bearish head shoulders pattern, albeit subtle, will have formed.  Overall, unless MBS prices continue to climb tomorrow, which will be extremely difficult, mortgage rates will be turning higher.

What does this mean for Mortgage Rates?  Mortgage rates edged lower today, but you may want to lock in those gains and be happy.  Tomorrow will be a key factor in the future of mortgage rates, though the outlook still favors higher mortgage rates from here.

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