Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on October 7, 2009

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +16bp

Mortgage backed securities are back on the climb as MBS prices have pulled back slightly in recent trading days and now are moving higher again.  Personally, I would have liked to have seen a larger pullback, but the charts still look OK at the moment.

Remember that this week is very light on economic data, but there are several Treasury Auctions happening as the week unfolds.  Yesterday saw the 4-week T-Bill, the 3-year T-Note auctions and the Treasury STRIPS.  The 4-week T-Bill was met with an almost scary demand level as the bid/cover ratio was 4.78 and the yield was 0.040%.  However, the 3-year T-Note was not even close to seeing the same demand as the bid/cover ratio was just 2.76, down from last month, and the yield was 1.445%, above its Coupon Rate of 1.375%, though it could be due at least in part because of the record supply at $39.0 B.

Today has already seen its data.  MBA Purchase Applications showed a 13.2% jump in Purchase Applications and a 18.2% jump in Refinance Applications.  The refinances are certainly not a surprise with mortgage rates dipping again, but the purchases may be those “last-minute shoppers” trying to get in on the $8,000 tax credit before it expires at the end of November (unless it gets extended).  Crude Inventories showed a drop of 1.0 M barrels, down from last week’s 2.8 M barrel increase.

What does this mean for Florida Mortgage Rates?  Mortgage rates will likely continue to hold steady, and may improve slightly from this point.  The long-term outlook remains favorable for stable to lower mortgage rates.

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