Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on April 16, 2009

Locking Stance: LOCKING    Mortgage Bonds: –3bp

Mortgage backed securities dropped early in the day, as I expected, but they managed a comeback in the afternoon, ending the day higher by 6 basis points, the high side of a 34 basis point range.  Inflation at the core level remains a concern, though not a very big one, but mixed signals surrounding the potential economic recovery can be seen, the latest in the Empire State Index.  What drove the markets higher in the afternoon was likely the level of foreign participation in long term Treasuries and MBS, which is back on the rise, even if just for one month.  I guess China and Japan, among some others, want to get in on the “free ride” provided by the Fed’s stepped up purchasing of MBS.

More data plays are to be had today.  Housing Starts this morning, along with Building Permits, soured those that believed the housing market was recovering.  Housing Starts was down 10.8%, coming in at 510K versus expectations of 570K.  Building Permits came in at 513K, which was down 9.0%.  Jobless Claims looked good on the surface by being better than expectations, but the 610K versus 658K report loses some of its luster when you realize it was for a shortened week due to Easter.  As the day unfolds, we will see the Philadelphia Fed Index at 10:00, which will likely stir the markets a bit and the Fed will continue to talk up the markets this afternoon.

While the technical indications are showing a better forecast ahead, and increased certainty about the future, I am hesitant to change my stance at least until after the Philadelphia Fed Index is released as it may send MBS pricing lower.  If you want to float until then to see if I change, just understand the risks and I will try to get an update out before any re-pricing may occur, one way or the other.

What does this mean for Florida Mortgage Rates?  Mortgage rates continue to edge slightly better, though some uncertainty remains about the future.  An update will occur sometime after 10:00, as quickly as possible, so don’t forget to subscribe to the RSS feed to ensure the quickest response.

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