Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on June 25, 2009

Locking Stance: LOCKING    Mortgage Bonds: +22bp

Mortgage backed securities ended the day fairly well, flat-lining after the initial fall post-Fed.  Today marks the fourth straight day that MBS pricing has been attacking their 200-day moving average, which is now above the 25-day moving average.  That’s right, we now have a negative moving average crossover, along with the double ceiling of resistance, though MBS pricing is currently above the “waterline” at the moment.  If mortgage bonds can close above this level in the coming days, lower mortgage rates will be seen.  If not, mortgage rates could jump again quickly.

Data plays for today are not going to make a huge difference in all likelihood today as traders eyes become focused on tomorrow’s PCE data.  However, we have already seen GDP data released.  Real GDP came in above expectations slightly, with a showing of –5.5% versus expectations of –5.7%.  The GDP Price Index was inline with expectations at 2.8%.  Jobless Claims were also released and exceeded expectations, coming in at 627K versus 600K, and that is giving mortgage backed securities their strength today.  We will have the 7-year T-Note Auction results released this afternoon (1:00 ET), which will weigh on the markets as well.  Yesterday’s auction went better than expected and today’s auction may give MBS pricing the needed boost, or drop their prices yet again.

Looking at the charts, there are mixed indications, though the next day or two can will prove either profitable or costly for those that float.  With stochastics moving to the high side of the spectrum, toward overbought, and the fact MBS pricing has failed to break and hold above their 200-day moving average for the last three days, I am erring on the side of caution and holding the locking stance for now.

What does this mean for Florida Mortgage Rates?  Expect mortgage rates to hold fairly steady today, though this afternoon’s Treasury Auction may change that.

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