Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on March 23, 2010

Locking Stance: LOCKING    Mortgage Bonds:  +9bp

Mortgage backed securities managed to edge higher, much on the heels of the short-term Treasury Auction results, which strengthened compared to last week’s auctions despite their growing sizes.  That plays out well for MBS prices and today’s auctions may carry the same results this afternoon.  Additionally, Giethner had some comforting words to say.

Today’s data was focused on housing.  Existing Home Sales was reported at 5.02M, slightly surpassing estimates of 5.00M, but down from last month’s 5.05M, keeping traders skeptical about a housing recovery.  The FHFA House Price Index (home prices for federal agency sponsored mortgages) declined in January, reportedly at –0.6% month/month and –3.3% year/year.  Two other minor reports were released this morning with the Redbook reported at 3.6%, up from 3.2%, and ICSC-Goldman Sachs Store Sales at 0.1%, up from –0.4% last week and at 3.7%, up from 3.2% year/year.  Overall, generally favorable data where it counts most for MBS prices.  This afternoon’s main focus will be the results of the 2-year T-Note auction released at 1:00.

So why not change the locking stance?  Uncertainty still controls the markets.  Additionally, we are up against the top of the last peak and MBS prices have failed to break out, meaning that sideways pattern is likely forming.  Stochastic indications still indicate MBS prices should be slowly dropping.  Generally speaking, it does not appear that anything more than a sideways pattern will form, at least for the moment, and we are at the top end of that pattern.

What does this mean for mortgage rates?  Once again, uncertainty abounds and we appear to be at the top end of a sideways trading pattern.  Things may change, even quickly, especially early afternoon, but the future still does not look favorable for significantly lower mortgage rates.

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