Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on December 29, 2009

Locking Stance:  CAUTIOUSLY FLOATING    Mortgage Bonds:  +12bp

Looks like we finally may be seeing that corrective move I have been waiting for as the “rubber band” has been stretched as far as it can go.  MBS prices ended the day down 35 basis points overall and down 18 from when I posted yesterday. 

The 3-month and 6-month T-Bill auctions were met with continued strong demand, though still not as good as two weeks ago, but hey, it’s the holidays.  However, the 2-year T-Note auction was rather soft with a bid/cover ratio of 2.91 and yields increasing to 1.089% from 0.802% last month.  Today will see the 5-year Treasury Note auction and things are not looking very good for that auction, and maybe not-so-good for MBS prices either.

Data is still fairly soft today, though we have seen the Case-Shiller Housing Price Index already and we will be seeing Consumer Confidence in about 20 minutes.  The Case-Shiller HPI came in showing barely an increase since the prior report, though the year over year change has improved significantly as a result.  The Composite 20 Index rose just 0.07 to 146.58, but that brought the year over year rate to –7.3%, up from –9.4% in September.  The price data for November does show solid improvement in existing and new home sales.  Don’t forget that this afternoon will see the results of the 5-year T-Note auction (1:00).

MBS prices still are overdue for a corrective move higher, with a solid 50% retracement being up about 102 basis points from yesterday’s close, which offers a significant improvement in mortgage rates.  However, volatility will likely continue this week and MBS prices may not act like the charts show as we have be seeing after that “pause” last week.

What does this mean for Florida Mortgage Rates?  Mortgage rates are looking to improve today, though that may change again later as the day progresses.  The short-term still shows the need for lower mortgage rates temporarily, but the overall trend remains strong for higher mortgage rates down the road.

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