Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on March 4, 2010

Locking Stance: LOCKING    Mortgage Bonds: +15bp

Mortgage backed securities continue to hold their ground, springing back to wards the flatline each day after moves up and down attempt to break free.  Things appear to look better, though I still do not like the charts overall, especially since we lack a solid correction.

Data today included the weekly Jobless Claims report, which came in slightly better than expected at 469K versus 475K, which is down from 496K last week.  The 4-week moving average dropped to 470.75K.  The 4-week moving average plays a more important role as it smoothes out the weekly increases and decreases, especially when there are special factors, such as the winter storms we have been experiencing.  Nonfarm Productivity was better than expected, coming in at 6.9% versus 6.3%.  Part of what is helping mortgage bonds today is the fact Unit Labor costs were lower than expected, coming in at –5.9% versus –4.5% and that helps ease inflationary fears.  Pending Home Sales dropped 7.6% as the Pending Home Sales Index came in at 90.4, down from 96.6 prior.  The NAR was quick to blame the weather though reality has shown a continued weak housing market despite the weather.

This afternoon has several Treasury Announcements coming up and that will likely add pressure to MBS prices.  Traders of mortgage backed securities will surely be watching these announcements, especially the 3-year T-Note, the 10-year T-Note and the 30-year T-Bond.  Remember that the added supply can bring down MBS prices, especially the longer term Treasuries.  Chicago Federal Reserve Bank President Charles Evans will also be speaking to the CFA Society of Chicago this afternoon.

What does this mean for Mortgage Rates?  Mortgage rates have been holding their ground, remaining steady or slightly improving lately.  The future is becoming more uncertain, though today may see a breakout of the very narrow sideways pattern they have been in. 

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