Florida Mortgage Rates – Morning Report

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

Locking Stance: LOCKING    Mortgage Bonds: +44bp

Mortgage bonds are off to the races again this morning as the Fed continues to prop up the mortgage backed securities prices.  I have warned about the consequences of artificially inflating prices like this, forming what is likely to be a “mortgage rate bubble”, a phrase I coined a while ago.

The ISM Services Index was released this morning and was higher than expected, coming in at 40.6 versus the expectations of 36.5.  While it beat expectations, it still showed a contraction, which is favorable for mortgage bonds.  This afternoon will see the release of the FOMC Minutes, the Fed unplugged as it were.

What does this mean for Florida Mortgage Rates?  Mortgage rates likely edged slightly better in pricing this morning, but like yesterday, they will likely back off when the Fed is done buying. 

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