Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on February 13, 2009

Locking Stance: LOCKING    Mortgage Bonds: +3bp

Well, mortgage bonds ran out of steam, or simply succumbed to the pressure of overhead resistance, closing down 19 basis points and solidifying their inability to break above their 50-day moving average.  The stimulus package is still awaiting full approval and many of the potentially good things are already being stripped from the bill, such as the $15,000 homebuyer credit.  All that will remain is likely the “agenda” related items.  Also, the Treasury Auction of the 30-year T-Bond did not go so well, though yields did drop.  The added supply certainly played a role in the tick higher in mortgage rates and will continue to do so as larger amounts enter the market to pay for all of the “stimulus”.  Money supply, interestingly enough, dropped for the first time in a while.

Today is rather light on the economic data, with Consumer Sentiment being the lone report for the day and it is due out at 9:55.  Technically speaking, mortgage backed securities are likely going to drop back down and test support, hoping to maintain a sideways trading pattern, but may even take the next step lower and send mortgage rates higher.  The Fed showed they purchased another $23.2B in MBS, again focusing on lower coupons only on Freddie Mac mortgage bonds while buying higher coupon bonds from Fannie Mae and Ginnie Mae.  This will not drive mortgage rates down and may not even maintain stability, certainly not keeping with the government’s promises of lower mortgage rates.

What does this mean for Florida Mortgage Rates?  Expect mortgage rates to tick higher and, at least for now, don’t plan on any government interventions to alter that course. 

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