Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on March 6, 2009

Locking Stance: LOCKING    Mortgage Bonds: -6bp

Mortgage bonds had a heck of a day yesterday with them breaking solidly through their 25-day moving average and even climbed to their 50-day moving average, which appears to be holding them back right now.  The rally yesterday was again attributable to the stock market’s continued fall and the money needing to go somewhere, therefore mortgage bonds benefited.  Adding to that, the Fed has once again stepped up their MBS purchasing, this latest week climbing to $59B, though the net purchase amount was just over $31B.  Interestingly, while the Fed still purchased large quantities of the 4.5% coupon bond, they are back favoring the 5.5% and 6.0% coupon mortgage backed securities (quick recovery of monies?)

This morning saw the Jobs Jamboree and the dismal outlook on the jobs market for this month, that is besides the weekly Jobless Claims numbers.  The latest is as follows:

Actual Expected
Non-farm Payrolls -651K -650K
Unemployment Rate 8.1% 7.9%
Hourly Earnings 0.2% 0.3%
Average Work Week 33.3 33.3

As you can see, job losses came in as expected, though the Unemployment Rate rose to 8.1% due to some revisions of previous jobs numbers (about 161K).  The other favorable news for mortgage backed securities is that the Average Work Week held steady while Hourly Earnings rose by less than expected, keeping wage-based inflationary fears somewhat in check.

Looking at the charts, mortgage bonds keep testing their 50-day moving average right now and have continued to be beaten back by this resistance.  With the recent run up of MBS pricing, a retracement is sure to occur, so a pullback to the 25-day moving average is likely.  If the picture changes, I will let you know.

What does this mean for Florida Mortgage Rates?  Mortgage rates have improved some in the last couple of days, but today will likely see them tick slightly higher.  The longer term picture has finally shown signs of lower mortgage rates, so check back next week for a btter forecast of the future.

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