Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on February 11, 2009

Locking Stance: LOCKING    Mortgage Bonds: -12bp

Mortgage backed securities had a nice run yesterday afternoon, following more promises to drive mortgage rates lower came from the Federal Reserve and the stimulus package was passed through the Senate.  Remember the last time we heard those promises?  Yep, mortgage rates went lower, ever so briefly, followed by a climb due to the fact the move lower was artificial as I have talked about. 

It will be interesting to see how traders play this momentum, but it may not be the same.  Also, keep in mind that while the Federal Reserve did start buying MBS, they recently have been buying higher coupon bonds and allowed mortgage rates to trend higher.  If they keep playing the game that way, mortgage rates will not be moving lower, simply holding steady.

Yesterday’s Treasury Auctions went fairly well as far as demand goes, but yields continue to climb, with the exception of the 4-week T-Bill.  The 4-week T-Bill dropped to 0.250% from 0.285%, the 52-week T-Bill climbed to 0.61% from 0.43%, and the 3-year T-Note climbed to 1.419% from 1.200%.  The amounts offered in each auction continues to rise, representative of the debt the Treasury is taking on these days.  Also, keep in mind that the Federal Reserve has stated they will (if not already), be buying Treasuries.

As for data, we already saw the MBA Purchase Applications which dropped this week and showed refinances dropped significantly as well.  Additionally, International Trade was released and showed the trade gap contracted but was worse than expected still.  In about an hour, we will see the EIA Petroleum Status, but expect some market reaction to this afternoon’s 10-year T-Note auction as well.

What does this mean for Florida Mortgage Rates?  While mortgage rates did manage a slight improvement yesterday, they will likely come under pressure today.  If they can hold, lower rates may be in the future. 

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