Florida Mortgage Rates – Morning Report

by Florida's #1 Mortgage Planner on September 25, 2008

Locking Stance:  CAUTIOUSLY FLOATING     Mortgage Bonds:  +28bp

You read it right, I switched my stance and there is just cause which I will get to in a moment.  Caution needs to remain as trader sentiment is still rather confused and things could yet get ugly and quickly.

So, why did I change?

Mortgage backed securities have been pushing hard against a determined layer of support and it has failed to break.  On top of that, the 25-day moving average is coming up to that same support layer, which will make it even harder to break.  Stochastics also have backed away, meaning selling pressures are losing steam, and we are potentially looking at a stochastic crossover as well.

Enough of the chart reading, now to the data that is giving bonds a boost this morning.  Initial Jobless Claims, as I eluded to yesterday, came in worse than expected again.  That is igniting a fire under mortgage bonds and they are higher as a result.  Adding fuel to the fire, Durable Goods Orders were worse than expected and soon we will likely see more dismal news on housing.

Overall, data was very favorable to mortgage bonds, and thus, mortgage rates.  We remain in turmoil over the bailout details as varying opinion and rumors about results cloud the air.  For now, bonds should be looking better and floating will likely be worthwhile.

{ 1 comment… read it below or add one }

Mortgage Jack September 25, 2008 at 8:50 am

We should hear some news about the bailout plan compromise today or latest tomorrow. Most likely there willl be requirement for governing body or congress oversight of the excecution of bailout plan added; also, democrats are pushing to require govenment to engage in mortgage renegotiations / loan modifications of mortgages held for the benefit of the homeowners.

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