Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on September 16, 2009

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: –13bp

Mortgage backed securities closed down only 4 basis points yesterday in what was a very wide trading range which stretched from the 100-day moving average at –35 basis points up to the flatline and you can see MBS pricing closed near the top.  And that was with some data that was not favorable for the most part. 

Today offers a different picture, but let’s hit the data first.  MBA Purchase Applications showed a large drop in Purchase Applications as they were down 10.3%.  Refinance Applications also fell, down 7.4%.  The big report of the day was the Consumer Price Index, or CPI, which came in inline with expectations.  Overall CPI was 0.4%, bringing the annual rate to –1.4% and the Core CPI was 0.1% bringing the annual rate to 1.5%.  his was good news for mortgage bonds and one of the reasons for the run-up this morning, which is losing steam.  So what happened?  Well, maybe it was the Industrial Production report.  According to the report, Production increased more than expected (0.8% versus 0.7%) as did the Capacity Utilization (69.6% versus 69.0%).  Crude Inventories came in at -4.7M versus expectations of -5.9M and the Housing Market Index will be released this afternoon.

Looking at the charts, there are some increasing indications of negativity.  Stochastics continue to look negative at the moment, and with the recovery yesterday followed by the crash thus far today, the correction may not be a correction and may end up being a trend reversal.  It is still too early to tell for sure, but be ready for anything right now.

What does this mean for Florida Mortgage Rates?  Mortgage rates are bouncing around again today and floating is not for the weak-hearted (or risk averse).  I am considering changing stances now, but will wait to see if the bottom holds.

{Updated to reflect current market conditions}

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