Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on November 5, 2009

Locking Stance: LOCKING    Mortgage Bonds: +3bp

Finally have my office set up in the new place.  Well, almost anyway.  Nevertheless, I don’t have to work off a tether to my cell phone anymore, which is a blessing for taking care of business. 

As for mortgage backed securities. they bounced off their lows, which were set shortly after the Fed released their Policy Statement.  Remember that the Policy Statement is much more important than their rate decision due to its outlook for the future, not just the present.  The Fed kept the Fed Funds Rate unchanged, to no surprise, but the Fed did not expand their MBS purchases beyond their $1.25 trillion and that is not what mortgage bond traders were hoping for.  The good news is that MBS prices rebounded to close the day up 6 basis points and kept the 200-day MA as solid support.

Looking at the charts, we see MBS prices trying to stay above their 50-day MA at this point, which would get them back into that narrowing trading gap they had been in, stuck between the 25-day and 50-day MAs.  However, the 25-day MA has turned lower and that may set up the long-term downtrend going forward.  Stochastic indications have swung negative again and the 100-day MA is flattening out, neither a good sign for lower mortgage rates.

What does this mean for Florida Mortgage Rates?  Mortgage rates are stable at the moment, but odds remain most favorable for higher mortgage rates in the future.

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