Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on April 22, 2010

Locking Stance: LOCKING    Mortgage Bonds: +3bp

Mortgage backed securities are struggling to make the needed gains today, having launched a failed attack on their double resistance at the 50-day moving average level (also highest level reached since falling through March 24th).  The good news is that they have managed to get just above this level, but the bad news is that they have been pushed back, leaving the future of mortgage rates in question, and with the Treasury Announcements coming up, momentum could shift lower and very quickly at that.

Today began to see some data that has some teeth.  None of the data was favorable for MBS prices, and thus low mortgage rates, despite the high Jobless Claims numbers.  Jobless Claims came in at 456K, but that was actually just below expectations, though the 4-week moving average climbing to 460.25K is somewhat favorable.  On the inflation front, the Producer Price Index, or PPI, came in at 0.7%, above the 0.4% expected and quite a change from the –0.6% last report.  The year/year PPI rose to 6.1%, and that is certainly not favorable to mortgage backed securities.  At the Core level (excludes food and energy), it was a better picture as PPI was inline with expectations of 0.1% and at 0.8% year/year.  Some traders will view that as favorable, though the main driving force today is the drop in stocks on the heels of continued concerns over Greece’s debt, and that of other countries as well.  Existing Home Sales was also higher than expected, coming in at 5.35M, up from 5.02M and above estimates of 5.25M.  That marks a 6.8% change month/month and brings the year/year rate to 16.1%.  The FHFA House Price Index dropped 0.2% month/month and 3.4% year/year, though not a real player.  That Treasury Auction Announcement will be released at 11:00, about 45 minutes from now, so watch for some serious movement around that time.

What does this mean for Mortgage Rates?  Mortgage rates are holding fairly steady right now, but momentum appears to be shifting towards higher mortgage rates.  The next hour or so will likely be key as the Treasury Announcement is delivered, but currently the charts favor mortgage rates climbing.

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