Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on November 13, 2009

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: 0bp

If you are a mortgage professional that reads this update, I am going to have a post up over the weekend at Florida Mortgage Report that you won’t want to miss.  Anyhow, it covers what happened yesterday, which was another day that many mortgage rate advisors said to lock as MBS prices tanked, but mortgage backed securities rebounded and were actually up 28 basis points at the end of the day.  These same mortgage advisors, such as MMG, cost many borrowers a lot of money by their knee-jerk reactions after a soft 30-year T-Bond auction.

Anyhow, let’s get into what is happening now.  Data this morning covered the Balance of Trade, Import and Export Prices, and Consumer Sentiment.  We even had another Fed speech, this time by Charles Evans, curiously titled "Should Monetary Policy Prevent Bubbles?".  The Trade Balance Level came in at $-36.5 B, below expectations of $-32.5 B.  Export Prices climbed 0.3%, which was higher than the estimate of –0.3%, bringing the year over year up to –3.4%.  Import Prices climbed 0.7%, also higher than estimates of 0.1% and outpacing Export Prices. , and year over year is up to –5.7%.  The more impactful report of the day is the Consumer Sentiment Index, which continues to fall, now at 66.0, well below estimates of 71.0.  Overall, more good news for mortgage bonds.

On the technical side of things, MBS prices have pierced resistance and are trying to hold that ground.  If they manage to do so, lower mortgage rates may be in the future.  However, they have already whipsawed back and forth across this level and are sitting right on it at this time.  The 50-day MA is now about to crossover the 25-day MA positively, but the short term outlook is turning negative as expected.  The 100-day MA is moving toward the 200-day MA quite nicely as well.  As mentioned, fast stochastics are now turning towards the negative side.  Slow stochastics, the longer-term, still have room for upward movement, though they are now in the overbought spectrum as well.  The bottom line is that MBS prices will need to break through resistance to stand a chance of lower mortgage rates, but it appears resistance may be too strong to break right now.  I will update you if I see MBS prices turning south and backing down.

What does this mean for Florida Mortgage Rates?  Mortgage rates are holding steady at the moment, and may even edge lower.  However, the short term may be for slightly higher mortgage rates, so you may want to lock before the day is done.  I will keep you posted.

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