Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on June 24, 2009

Locking Stance: LOCKING    Mortgage Bonds: +6bp

Mortgage backed securities attacked their 200-day moving average several times yesterday, each time being beaten back.  At one point, MBS pricing crashed, causing many to rush to lock, which may or may not be a bad thing, so long as they locked you before the re-pricing started.  By the time the trading day closed, mortgage bonds closed up 3 basis points, considerably higher than the lows they reached.

Today presents a very interesting day to say the least.  We have a fairly decent stochastic indication, though in the middle ground, but we also have a more important indication in my opinion.  Since mortgage backed securities have failed to break through their 200-day moving average, their 25-day moving average has been coming down to meet them and is now sitting just above the 200-day MA, thus creating a double layer of resistance.  The bottom line is that MBS pricing will need a major catalyst to break this “thick ceiling” in order to bring lower mortgage rates, and that may or may not happen today, as we the day has just begun.

Durable Goods Orders were released and they beat expectations, coming in at 1.8% versus the consensus of –0.5%.  Removing transportation from the list and we still have a 1.1% gain, up from last month’s 0.8%.  That will put some pressure on MBS pricing today, though most traders will be awaiting this afternoon’s excitement, the FOMC Meeting Announcement and the 5-year T-Note Auction results.  Other data about to be released includes New Home Sales and Crude Inventories and this morning’s MBA Purchase Applications showed purchase applications 7 percent and even refinances were up 6%.

What does this mean for Florida Mortgage Rates?  Mortgage rates will hold steady, if not tick slightly higher, in the morning.  In the afternoon, things will likely change very quickly, for better or worse.  I prefer locking in these situations based on the charts, though a dramatic event may bring rates lower.

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