Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on March 30, 2010

Locking Stance: LOCKING    Mortgage Bonds: –19bp

Yesterday, mortgage backed securities managed to get to the 100.53 price level, which was the 200-day moving average, then fell back in what is now appearing to be the beginning of the next leg lower.  We are holding onto support at the moment, but that may cave in in the next day or so.  If we hold, the pattern may be changing for the near-term.

The day started off with Chicago Federal Reserve Bank President Charles Evans speaking on regulatory reform and risk management in Hong Kong, then data started flowing.  The ICSC-Goldman Store Sales report showed Store Sales up 0.6% week/week and 3.2% year/year.  The Redbook Report showed Store Sales at 4.4% year/year.  Neither of these are significant players, but worth noting.  The S&P Case-Shiller Housing Price Index (HPI) showed continued gains.  The unadjusted 10-city Index fell 0.2% month/month, though when seasonally adjusted it showed a 0.4% rise.  The unadjusted 10-city was reported at 0.0% year/year.  The S&P Case-Shiller Composite 10 is now at 157.89 and the Composite 20 is at 145.32, both down slightly from the prior report, but these are unadjusted so the general direction still points towards gains.  And one of the main reasons MBS prices fell today is the Consumer Confidence report which was reported at 52.5, exceeding expectations of 50.0 and up from the prior 46.0.  Of course, that is before the passage of Healthcare Reform.

Looking at the charts, we see some hope still, but if MBS prices cannot rebound, they will have formed another peak and that generally means they are heading lower again.  While I expected them to get to their 10-day moving average as a solid retracement period, that big of a retracement may not take place this go around, so it is better to go ahead and lock to be safe.  Stochastic indications are still good, roughly middle ground and slightly positive.  We are holding at support so far today, so do not lose hope just yet, though the pattern remains favoring higher mortgage rates.

What does this mean for Mortgage Rates?  Mortgage rates are edging higher this morning, though they are bouncing back slightly.  That leaves the short-term outlook uncertain, though the long-term outlook still favors higher mortgage rates.

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