Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on June 19, 2009

Locking Stance: LOCKING    Mortgage Bonds: –44bp

Well, yesterday went exactly as I had expected, with the 200-day moving average failing to hold as support and mortgage backed securities came crashing down yet again.  I also mentioned yesterday that whatever what set in motion would likely carry through to today since there was no data slated for release, and that is exactly what mortgage bonds are doing right now.

As I mentioned, there are no data plays today.  Yesterday’s freefall came on the heels of the Treasury Announcement, just as expected, and increased speed after the Fed released the fact they have cut back on purchasing MBS.  Hmmmm…More supply and the Fed isn’t buying right now…any guess as to why the freefall?

OK, that means technical indications are leading the way for the foreseeable future.  On the one hand, we have yet another big move, which will likely need a correction, or is this a correction of the latest upswing?  Only time will tell for sure.  But, we have two big negatives for MBS pricing.  First, we have a negative stochastic crossover with stochastics in the middle ground, so there is plenty of downside movement available.  Add to that, we have a long way yet to drop before we reach the next layer of support, so it is virtually guaranteed we will see rising mortgage rates, at least for the short term.

What does this mean for Florida Mortgage Rates?  Mortgage rates are back on the climb for the foreseeable future.  The overall trend is favoring rising mortgage rates again, though there still remains some uncertainty.

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