Florida Mortgage Rates – Morning Report

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

Locking Stance: LOCKING    Mortgage Bonds: –31bp

Well, if any of you had been wondering why I have been holding that locking stance, today shows the reason as the weakness shown in the charts (technical indications) ultimately took over and we are seeing a collapse of MBS pricing this morning.  Mortgage backed securities failed to break above the double resistance layer, ending the day crammed in the tight space (2 basis points wide) between the 100-day and 200-day moving averages, demonstrating again that they lack the strength to buck the long term downtrend.  The good sign is that MBS pricing is off its lows at this time.

Data this morning included the weekly Jobless Claims report, along with the GDP report.  Jobless Claims was essentially inline with expectations, coming in at 570K versus 560K.  GDP beat expectations, coming in at –1.0% versus expectations of –1.5% and the GDP Price Index came in at 0.0%, which was below the consensus of 0.2%, providing a mixed report regarding mortgage bond reaction.  The 5-year Treasury Auction yesterday had strong demand, but sloppy bidding, leaving traders wondering what lies ahead with this afternoon’s 7-year T-Note Auction.  James Bullard will also be speaking today at 5:00.  Tomorrow will be a big data day as well.

What does this mean for Florida Mortgage Rates?  Weakness has finally won the day, and mortgage rates have ticked higher.  The long term still is signaling a trend of higher mortgage rates.

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