Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on October 22, 2009

Locking Stance: LOCKING    Mortgage Bonds: –19bp

Mortgage backed securities managed to find some strength yesterday as stocks fell from their highs.  Unfortunately, they failed to remain above even their 25-day moving average, though they did manage to test their 10-day moving average during the day.  At the completion of the day’s battle, they were down just 6 basis points.

Today marks another day of back and forth, though MBS pricing is again falling as expected.  The charts are showing more and more negativity with each down day as you can imagine and even today’s favorable data does not seem to be helping.  Jobless Claims were worse than expected, coming in at 531K versus 519K and were higher than the prior 514K.  Continuing claims were down 98K, but the reasons why were uncertain as those receiving extended benefits fell 16K while those receiving emergency compensation rose 41K.  Leading Indicators were just released and were slightly higher than expected, coming in at 1.0% versus 0.9%.  The FHFA Housing Price Index was worse than expected, coming in at –0.3% versus 0.3%, though the year over year was better than expected at –3.6% versus –4.2%.  In just under an hour, things could get ugly for mortgage bonds as the Treasury Department announces the amounts of the upcoming Treasury Auctions.

Looking at the charts, we see the 10-day moving average in a nosedive, having already crossed over the 25-day moving average, it has targeted the 200-day and 50-day moving averages in what may be a direct attack on their ability to create a positive crossover of each other.  Stochastic indications favor the oversold position, but are far from that spectrum at the moment and are turning negative as well.  Once again, it appears that the correction is complete and we will see if mortgage bonds can muster the strength needed to keep a downtrend from truly forming.

What does this mean for Florida Mortgage Rates?  Mortgage rates continue to climb, albeit slowly, and the outlook remains most favorable for higher mortgage rates.

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