Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on April 12, 2010

Locking Stance: LOCKING    Mortgage Bonds: +19bp

As I mentioned in this week’s Mortgage Market Update at Lenderama, MBS prices would have to rally out of the starting gates this week to keep any hope alive for lower mortgage rates.  Today, thus far, they are doing just that, but there is a lot of negativity that remains in the chart patterns, hence my decision not to change stances at this time.

There is no data on the docket for today, except for the Treasury Budget report which does not typically affect MBS prices.  There are the two weekly short-term Treasury auctions, which and drop in strength could carry over into the mortgage backed securities market as well.  Things will begin to pick up tomorrow and we can start trusting chart patterns more as the data and plethora of Fed speeches begins to play out.

As mentioned, the charts still paint a mostly negative picture.  Moving averages have virtually all turned lower, with the 25-day having broken below the 200-day and the 50-day trying to do the same right now.  The only moving average that has not turned lower yet is the 200-day, but that is very slow to change, so just give it some time.  The 10-day has flattened out its descent and is even providing support at the moment, and therein lies the ray of hope.  Adding to that, the charts are skewed somewhat due to Friday’s monthly bond rollover, which effectively erased the MBS price gains achieved on Friday and made the charts look worse than they were.  The next couple of days will be key to setting, or resetting the pattern.

What does this mean for Mortgage Rates?  Mortgage rates are edging lower this morning and are attempting to change the future.  The next couple of days will be key, but the overall outlook remains most favorable for higher mortgage rates, at least at the moment.

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