Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on March 17, 2010

Locking Stance: CAUTIOUSLY FLOATING    Mortgage Bonds: +3bp

Yesterday’s FOMC Meeting Announcement was favorable received by the mortgage backed securities market, mainly on the Fed’s viewpoint surrounding inflation.  As a result, MBS prices climbed and that puts them above their 25-day and 100-day moving averages and changes the future outlook, though still not overly certain.  Today and especially tomorrow will solidify the future in all likelihood.

I am not going to break down the Fed here, but will get a breakdown on the FOMC Meeting Announcement over at the new Florida Mortgage Report later today or tomorrow.  Today’s data started off with the weekly MBA Purchase Applications report, which showed purchase applications fell 2.3% and refinance applications fell 1.7%.  With the bad weather, the numbers aren’t surprising.  The refinance applications side shows that low mortgage rates are not boosting refinance demand, which means that aspect may be “drying up”.  Helping mortgage bonds today was the Producer Price Index, or PPI.  Overall PPI came in at –0.6%, well below expectations of –0.2% and at 4.6% year/year.  Core PPI (less food and energy) the numbers were inline at 0.1% and 0.9% year/year, easing slightly from last month.  Crude Inventories were reported at 1.0M barrels.  Big Ben, Bernanke that is, is slated to speak at 2:00, so markets could move around this time, but that may not be the case as the highlights are already released, leaving only the Q&A session in question.

Looking at the charts, we see a change for the positive, namely that MBS prices broke through some resistance and are free to climb a little more.  That being said, the outlook is still questionable and a trend is yet to be solidified, so extreme caution needs to be exercised if you do decide to float.  What I see is MBS prices trying their best to set up a sideways trading pattern, but that could turn into something else still, even a slow downtrend. 

What does this mean for Mortgage Rates?  Mortgage rates edged lower and likely will hold steady today with tomorrow being more important.  The future is uncertain, but odds have swung to slightly favor steady or even lower mortgage rates from here.

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