Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on May 8, 2009

Locking Stance: LOCKING    Mortgage Bonds: 0bp

Yesterday was another time where I wished I was wrong in my analysis, but reality hit the markets and MBS pricing tanked.  In fact, it did exactly what I expected, and then some.  Mortgage backed securities not only fell to test their 50- and 100-day support layers, but they broke right through them, possibly signaling what I have been discussing for some time, higher mortgage rates are coming.

The move yesterday was after a better than expected Jobless Claims, but the real problem hitting the markets and sending mortgage bonds crashing through the floor was the dismal 30-year Treasury Bond Auction.  This lackluster event showed that traders are demanding higher yields and are not overly enthusiastic about T-bonds any more, thus leaving the Fed to carry they buyers side of the market.  Regarding MBS purchasing, as I stated before, the Fed has increased their purchasing again in a failed attempt to hold mortgage rates steady.  We have yet to see the media’s hype about 4.5% (without points) and especially Jim Cramer’s praise of 4% mortgage rates coming.  Hopefully you already refinanced or bought that house and didn’t buy into the BS.

Now, today already saw the release of the Jobs Jamboree and guess what, it beat expectations.  Nonfarm payrolls came in at 539K versus expectations of 630K.  The Unemployment Rate came in inline with expectations of 8.9%.  Hourly Earnings were just below expectations of 0.2%, coming in at 0.1%.  And the Average Work Week was as expected at 33.2 hour.  Overall, while the market had been expecting a better jobs report, especially after the ADP Employment Report on Wednesday, it is still not good news for mortgage rates.  I expect that with the MBS pricing falling off a cliff, we will see some improvement, retesting the 50-day moving average to see if it becomes resistance, which I suspect it will.  With some luck, we will get back into that sideways trading range, but I am skeptical of that at this time.

What does this mean for Florida Mortgage Rates?  Mortgage rates jumped yesterday and you can expect them to be on the rise unless the picture changes.

Leave a Comment

Previous post:

Next post: