Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on February 27, 2009

Locking Stance: LOCKING    Mortgage Bonds: -6bp

Mortgage bonds ended the day in another “doji”, meaning they went quite a bit higher and lower during the day, but ended the day close to where they started.  They did bounce of their support, which is a good sign and we can hope that it holds, but today is another day which could test that level.

Mortgage backed securities opened higher as they continued their bounce from their support.  The data plays are in are in, though there are some speeches from the Fed slated for the day, with Fed Governor Elizabeth Duke speaking in a few minutes and Eric Rosengren at 1:30.  The data this morning went as follows:

  Actual Expected
GDP -6.2% -5.4%
Chain Deflator (Price Index) 0.5% -0.1%
Chicago PMI 34.2 34.0
Consumer Sentiment 56.3 56.0


As you can see, the GDP was below expectations, however as it relates to inflation, it was considerably higher than expectations.  Also, with Chicago PMI beating expectations, even slightly, that will likely weigh on MBS pricing. Consumer Sentiment even edged in over expectations, adding more pressures to pricing.  Let’s hope the Fed is still buying (or at least short traders covering their positions) today or we may see support falter.

Another point worth looking at is the Fed’s MBS purchases.  They have stepped up their buying (up to $25B) and changed their focus to lower coupon mortgage bonds, namely the FNMA 4.5% coupon bond which is currently driving mortgage rates.  Despite their purchasing, mortgage rates have been ticking slightly higher and have failed to break through the resistance of their 25-day moving average, which I have talked repeatedly about before.

What does this mean for Florida Mortgage Rates?  Continue to expect them to hold steady or even climb from here.

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