Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on April 16, 2010

Locking Stance: LOCKING   Mortgage Bonds: +9bp

I find myself in Brasil again this week.  Actually it has become a favorite spot now as it “fits” my schedule the best.  During the flight down, conversations about the various global markets were quite interesting, though I will leave them out and stay on focus, but mortgage backed securities were among the topics.

Mortgage backed securities are attempting, yet again, to break through the resistance of their 25-day moving average.  If they fail to do so, the outlook will remain negative.  If, however, they can successfully break through this persistent barrier, lower mortgage rates will be on the way.  Thus far, the outlook is turning negative, possibly forming a head and shoulders pattern, which would be very bearish.

Data today started with the Housing Starts report which showed Housing Starts rose to 626K from 575K, beating estimates of 605K.  The report also showed Building Permits rose to 685K from 612K.  Consumer Sentiment was favorable for lower mortgage rates as Consumer Sentiment was reported at 69.5, down from 73.6, moving in the opposite direction of estimates, which were for a rise to 75.0.  The data sparked the latest failed assault on the 25-day MA resistance.

What does this mean fro Mortgage Rates?  Mortgage rates edged lower out of the starting gate this morning, but appear to be turning higher again.  While it is still too early to tell for sure, it appears mortgage rates have expended all their strength trying to edge lower and will now turn higher.  Today, and the next couple of trading days will solidify this reality.

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