Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on February 18, 2009

Locking Stance: LOCKING    Mortgage Bonds: -6bp

Mortgage bonds had a nice run up yesterday and allowed a brief chance to gain slightly better pricing on your mortgage rates.  Don’t fall prey to thinking that rates are heading lower, at least not yet, because as I suspected, they failed to break through resistance, yet again.

The only normal data play yesterday was the Empire State Index and that missed big time, hitting a record low and sending stocks lower and allowing mortgage backed securities to push up against their resistance of their 25-day moving average, which is now below their 50-day moving average (not good news).  Stochastics are at least looking a little better, but they are far from showing MBS’s ability to break the ceiling. 

Yesterday’s other news and data was that Barack Obama signed the extension of our current Greater Depression by signing the stimulus bill, inappropriately named .  He is expected to add billions more in Treasury expenditures on his own this morning as he details his mortgage foreclosure relief and homeowner bailout program that will make moral hazard a pipe dream.  The Housing Market Index showed some signs of life as it ticked slightly higher, but buyers appear to be returning so the relief could be shown to be too much too late.  Treasury auctions saw a slight drop in yields overall on high demand as the news of the stimulus package sent everyone fleeing to perceived safe havens.  Gold jumped significantly and marks a huge run up recently and that means that inflation is returning as well in all likelihood.

Today has some more data plays involved.  MBA Purchase Applications showed improvement this week, even in refinances.  Housing Starts showed Housing Starts below expectations, down 16.6% and Building Permits were below expectations as well.  That is good news for those hoping for a recovery of the housing market as it minimizes inventory, but for the overall economy it is clearly bad news, which is good for mortgage backed securities.  The G.17 Statistical Release showed Industrial Production was below expectations as was Capacity Utilization.

What does it mean for Florida Mortgage Rates?  Mortgage rates will likely hold steady today as mortgage bonds will likely try to break through resistance and fail again.  If they can break resistance, we can then talk about lower mortgage rates, but I don’t see that happening right now.

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