Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on December 9, 2009

Locking Stance: LOCKING    Mortgage Bonds: –16bp

Mortgage backed securities showed that they have no desire to make another move higher as yesterday turned lower after a not-so-good 3-year Treasury Note auction.  Remember that I said on Monday that this week’s Treasury auctions would be the deciding point, and they are proving to be just that.  Despite yesterday’s leap higher, weakness hit the markets and they closed well off their highs, though they were still 22 basis points better than the day before and just below resistance.

Once again, there are no real data plays and today’s 10-year T-Note auction will be the thing to watch.  MBA Purchase Applications showed Purchase applications rose 4.0%, though the refinance index jumped 11.1%, probably due to the turn higher in mortgage rates getting those fence-sitters moving, though it could just be the extremely low mortgage rates.  We will see Wholesale Trade and Crude Inventories released later, but don’t expect much before the 10-year’s results are released at 1:00.

Looking at the charts, what could have been a good thing is now looking ugly as I suspected it might.  With MBS prices falling today, we could see the finalization of a downtrend formation, which is not good for mortgage rates.  Additionally, we may be seeing a “head and shoulders” pattern which is negative as well.  If all this forms, that last bounce higher will be simply a retracement of the prior downside move, which is what I feared it would be rather than a solid retracement of the prior two legs higher.  The bottom line is we need to see MBS prices hold here or else.

What does this mean for Florida Mortgage Rates?  Mortgage rates are edging slightly higher this morning and that “cloudy” forecast is clearing up, but it is not looking good for lower mortgage rates as I had hoped.

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