Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on May 21, 2010

Locking Stance: LOCKING    Mortgage Bonds: +9bp

Finally got settled in a new hotel room down here in Brasil, so let’s get down to business.  Yesterday, I mentioned the need for a corrective move, or retracement, despite the charts looking good.  Well, I have changed my stance back to locking at this point as I think it is time to take your savings and I believe that correction may be about to start.

Stocks have been getting hit lately, so they also need a correction, only higher, which will pull money from mortgage backed securities and likely cause MBS prices to drop.  MBS prices rose early in the day, but have since pulled back and are now slightly below their open, signaling some weakness.  There is no data to be seen today so traders will rely on news and stocks to decide where the money should be going into the weekend.

Looking at the charts, overall things remain strong for lower mortgage rates, though with stochastic indications and the weakness displayed at the moment, we likely are seeing the end of the current rally and will see mortgage rates climb in the near-term.  Whether or not the long-term trend can remain more of an uptrend remains to be seen, but we will know that answer soon enough.  For now, be safe and be happy with the savings you have had following my advice during this latest run.

What does this mean for Mortgage Rates?  Mortgage rates held steady or edged slightly lower this morning, but it looks like it is time for at least a short-term climb in mortgage rates.  While the short-term outlook shows a need for at least a brief tick higher, the longer-term outlook favors steady to lower mortgage rates down the road a ways.  Unfortunately, the long-term outlook is not solid at the moment, so even if you have a while to close, locking is likely still the best option.

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