Florida Mortgage Rates – Morning Report

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

Locking Stance: LOCKING    Mortgage Bonds: +16bp

Mortgage backed securities had another up and down day, ultimately ending the day down 38 basis points and, more importantly, below their 50-day moving average.  MBS pricing just couldn’t get a break and today may not have anything good either, though they are trying to monkey up some strength from somewhere.

This morning held even more data for mortgage bonds to digest.  Some good news is that the Treasury International Capital report showed Foreign Demand for Long-Term US Securities rose to $28.6B, but certainly not at a pace that matches the speed at which the government is spending.  Industrial Production was considerably higher than expectations, coming in at 0.7% versus 0.2%.  Additionally, Capacity Utilization Rate beat expectations, coming in at 70.5% versus 69.6%.  Those numbers provide further indications that the manufacturing sector is improving. But it looks like mortgage bonds got a bit of breathing room as Consumer Sentiment came in below expectations at 69.4 versus 74.0.  Unfortunately, this breather may not be enough to get MBS pricing back into a good trend.

Reading the charts we have some mixed signals still, though one unusual signal is that the DOW keeps moving higher without a significant enough retracement, so a crash may be coming, possibly all the way back to the mid-8000s, and that would be good for mortgage bonds in all likelihood.  Stochastic indications are turning positive and are edging into the oversold spectrum, so mortgage backed securities appear to be wanting to correct themselves, maybe even back to their 25-day moving average.  Only time will tell for sure, but we may see a brief period of lower mortgage rates before the climb continues.

What does this mean for Florida Mortgage Rates?  Mortgage rates are still on the rise currently and the outlook remains favorable for higher mortgage rates, though a short-term period of slightly lower mortgage rates may be in the works.

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