Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on December 31, 2008

Locking Stance: LOCKING    Mortgage Bonds: +50bp

Mortgage bonds are up on a day when they likely should be down and that is just scary right now.  I will get into why in just a moment, but let me recap yesterday briefly.  Mortgage bonds were down hard out of the starting gate, but then ended the day off its lows, down 25 basis points.

This morning saw unfavorable data in that Initial Jobless Claims fell to 492K, blowing away expectations of 575K.  In and of itself, it does not mean that the jobs front is getting better, but typically markets react negatively to numbers like this.  The only favorable news in the report is that the continuing claims remain at a 26-year high.

So what is really driving mortgage backed securities higher today?  It is again all about the Fed.  The Fed is not happy that mortgage rates are not low and that the markets will not drive them lower, so they made an announcement that the $500 billion they are going to use to buy mortgage backed securities will begin in January.  This is again artificially propping the markets, creating another bubble made by the government’s actions.

What does this all mean for Florida Mortgage Rates?  While you may see slightly better mortgage rates today, possibly even in January, right now it is still better to just lock your loans as volatility can change the picture very quickly.  If the picture changes significantly, I will let you know.

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