Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on October 6, 2009

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: –6bp

Mortgage backed securities dropped 13 basis points from my post yesterday, but as I said before, that was not unexpected.  Also, not unexpected is this morning’s drop as we have been in need of a corrective move as I mentioned.  I also mentioned to keep an eye on the Treasury Auctions, so let’s take a look at how they went.

Here is a chart showing the 3 Treasury Auctions results:

  Bid/Cover Coupon Rate

Total Amount

Yield

3-month T-Bill

3.67

NA

$30.0 B

0.075%

6-month T-Bill

3.49

NA

$30.0 B

0.150%

10-year TIPS

3.12

1.875%

$7.0 B

1.510%

It is amazing the difference a few months makes.  The 10-year TIPS auction back in July had $1 B more in supply, but had a bid/cover of 2.51, the same coupon rate, but the yield was a 1.920, 0.42% higher than yesterday’s, so yields are going down and that is good news for mortgage rates.  The 3-month back in July was at 0.190%, 0.115% higher, and the 6-month back in July was at 0.275%, 0.125% higher.

Today has some more Treasury Auctions; the 4-week T-Bill, the 3-year T-Note, and the Treasury STRIPS.  With yesterday’s auctions seeing strong demand, and with a lack of data again today, we should see strong demand again today and that will likely carry over into the mortgage bond market as well.  Remember though, we do need to see stable prices, if not a fairly significant pullback, before we will likely see mortgage rates edging lower again.

What does this mean for Florida Mortgage Rates?  Once again, short-term (few days or so) is for stable to slight higher mortgage rates.  Long-term remains for stable to possibly lower mortgage rates.

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