Florida Mortgage Rates – Morning Report

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

Locking Stance: LOCKING    Mortgage Bonds: –25bp

Mortgage backed securities crashed through the double layer of support yesterday, falling 66 basis points on the day and breaking below both their 100-day and 200-day moving averages.  With the short-term Treasury Auctions (3-month and 6-month T-Bills) easing back some, weakness can be seen across the bond and treasury markets.

This morning’s GDP came in weaker than expected at 2.2% versus 2.7% and the GDP Price Index (aka Chain Deflator) came in at 0.4% versus 0.5%.  MBS prices rose slightly after the release of the GDP, but they are still well below the flat line for the day.  Existing Home Sales will be released in about 40 minutes at 10:00, along with the FHFA House Price Index.

Looking at the charts, the negatives keep winning.  With MBS prices falling through the moving averages, the trend is now solidly a downtrend and higher mortgage rates are on the way barring some miracle.  Can we see a Tiny Tim type miracle this Christmas for mortgage bonds?  PCE and Consumer Sentiment will be released tomorrow, but so are the Treasury Announcements which include the 2-year, 5-year and 7-year Treasury Note Auctions coming up and the added supply could drive prices even lower.

What does this mean for Florida Mortgage Rates?  Mortgage rates continue to climb and will do so for the foreseeable future.

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