Florida Mortgage Rates – Midday Report

by Florida's #1 Mortgage Planner on June 24, 2008

Locking Stance:  LOCKING     Mortgage Bonds:  +19bp

Mortgage bonds are up today, 19bp at the moment, but are off their highs as well.  Bonds were propelled higher on the heels of a weak stock market and a dismal consumer confidence report.  Is the move higher unexpected?  Not really as stochastics still show bonds on the oversold side and the correction we had may not have been enough.

Where are mortgage rates headed from here?  Odds still favor lower bond prices meaning higher rates and tomorrow’s Fed decision will be the first “kicker”.  If we get a surprise, we could see bonds buck the trend, but I am not expecting them to raise rates even though they should, and bonds will likely suffer.

Remember that when the Fed raises rates, mortgage rates tend to drop as the move is seen as an effort to minimize inflation, so it is actually favorable to bond prices and lower rates are a result.  This week, as I have mentioned before, will be a wild ride and the end will see either bonds breaking the downward trend or falling off the cliff.

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