Florida Mortgage Rates – Midday Report

by Florida's #1 Mortgage Planner on November 19, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  +3bp

Mortgage bonds have had another up and down day, moving either side of their 200-day moving average.  The sad thing is that we are seeing what should amount to a huge rally become a teeter-totter day yet again.

This morning started off with the CPI data that showed inflation backing down at the consumer level, in fact igniting fears of deflation.  Couple that with the remaining data pointing heavily towards the recession fear spectrum, there should be huge influxes of money into the mortgage backed securities market.

The VIX, or fear index for the markets, is up over 72, which is indicative of major volatility, so the swings (volatility) should be larger, yet we remain virtually unchanged.  Treasuries are doing better, but with the issues plaguing commercial mortgage backed securities as well, mortgage bonds remain on the sidelines for the most part.

Once again, the charts paint a picture that seldom lies, and that means the continued failure of mortgage bonds to climb will most likely result in higher mortgage rates ahead.

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