Florida Mortgage Rates – Morning Report

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

Locking Stance: LOCKING    Mortgage Bonds: 0bp

Mortgage backed securities had a really bad day yesterday, starting with the Consumer Confidence report, then the afternoon sent them crashing through the floor.  And when they crashed through that floor, they broke through the bottom of the trading range they had been in.  Yes, it appears the “Mortgage Rate Bubble” may have just popped.

All hope is not completely lost yet, though.  There will be a retracement eventually, the question being when and how much.  There is also a chance that MBS pricing can improve enough to get back in their trading range, though this scenario seems unlikely.  One thing is for sure, mortgage bonds will need a big boost from data to do so, but I don’t see that happening.

MBA Purchase Applications were released this morning and showed purchase apps up slightly, though still weak, and refinances are dropping off as mortgage rates begin their climb.  Still to come will be Existing Home Sales and Crude Inventories, followed by the beginning of the flood of longer term Treasury Auctions, this afternoon’s being the 5-year T-Note.  The added supply may place some unwelcome pressure on MBS pricing this afternoon, though the remainder of the data will not have a big effect.

What does this mean for Florida Mortgage Rates?  As I have been saying, the long term picture for mortgage rates has been for them climbing higher.  There will be a short term advantage, the question is when and if it will be worth it to float until that point.

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