Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on November 19, 2009

Locking Stance: LOCKING    Mortgage Bonds: +12bp

Mortgage backed securities are showing some strength right now having recovered a little yesterday, ending the day down only 6 basis points.  This morning, they are slightly higher than their open, sitting up 12 basis points higher than yesterday’s close and erasing yesterday’s losses, but there remains the issue of a genuine retracement, which they still are lacking.

The move higher this morning is due to Jobless Claims coming in essentially inline with estimates at 505K.  This number is slightly higher than last month’s reading of 502K.  Once again, the continuing claims fell, now down to 5.611 M, but most of these are likely due to the expiration of benefits.  We still have yet to see the Philadelphia Fed Survey and LEI, or Leading Economic Indicators, both due out at 10 am.  The Philly Fed usually impacts the markets, so watch for the market’s reaction around 10:00.  The Treasury Department will be making their next auction announcement at 11:00, and that may pressure MBS prices lower, especially as they announce the 2-year, 5-year and 7-year Treasury Note amounts.

As we look at the charts, the latest measure of strength in MBS prices is keeping stochastic indications in the overbought spectrum, meaning that retracement still needs to take place.  Mortgage bonds prices cannot move much higher without this corrective move taking place, hence mortgage rates cannot move significantly lower at the moment as well.  There are still positive signs for the longer-term, but short-term remains most favorable for higher mortgage rates.

What does this mean for Florida Mortgage Rates?  Mortgage rates are likely going to continue to edge higher for the short term, but the longer term outlook remains favorable for mortgage rates to hold steady or edge lower.

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