Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on February 25, 2009

Locking Stance: LOCKING    Mortgage Bonds: 0bp

Mortgage bonds continue to fail to break through their 25-day moving average, a resistance layer that is slowly pushing them lower and will result in mortgage rates slowly climbing.  Although, the rate of mortgage rates rising may actually increase if the Fed changes their plans as they appear to be the main purchasers of MBS and thus have only managed to keep mortgage rates fairly steady.

Data yesterday was dismal as Consumer Confidence was the lowest ever recorded, certainly not a good sign and while it normally would send mortgage backed securities through the roof, it failed to do so as Bernanke talked up the stock markets, calming fears of bank nationalization (which will problem happen anyway).  And with President Barack Obama’s speech last night talking about even more government spending (did you honestly think it would stop at the stimulus package?), threats of inflation and even hyper-inflation remain.

So what is up for today?  Once again Big Ben will be testifying to congress, this time the House.  Expect more of the same reaction, especially after the Obama speech last night.  As for data, the MBA Purchase Applications was released this morning and showed a slight drop in mortgage application activity.  In about an hour, Existing Home Sales will be released and you can expect that to be low, though it may beat expectations.  This afternoon will see an influx of supply with the auction of the 5-year T-Note, so mortgage bonds will see pressure from many sides today.  Crude inventories will also be released at 10:30.

What does this mean for Florida Mortgage Rates?  Expect mortgage rates to favor rising further with the Fed unable to drive them lower, at least for the foreseeable future.

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