Florida Mortgage Rates – Weekly Report

by Florida's #1 Mortgage Planner on February 8, 2010

As I have now started posting regularly on MBS Commentary, I have decided to keep all posts here duplicated there, at least for now.  It may yet evolve into something else, but let’s see how it goes.  MBS Commentary is still under development, so expect many changes coming, possibly even a complete redesign.  Nevertheless, it is up and running.  OK, here is the first Weekly Mortgage Rate Forecast Recap…

What Happened Last Week?

Last week saw continued volatility to say the least, but did see MBS prices break through important levels of resistance, and thus changed the outlook.  They did so despite not so favorable data and news.  They started off the week taking a beating as stocks rallied, but the 10-day moving average held them and continued to drive mortgage backed securities higher and higher.  Most everything centered around the jobs front and things were not looking too good after Wednesday’s ADP Employment Report and the Treasury Announcements for this week’s longer-term Treasury Auctions.  It looked like the proverbial “nail in the coffin” as the 50-day MA proved too strong to break and MBS prices dipped below their 10-day MA.  But mortgage bonds rallied back Thursday and changed the entire picture by not only getting back above their 10-day MA, but breaking through both the 50-day and 100-day MAs definitively.  Friday came and was as expected, the Jobs Report was slightly better than expected and MBS prices took a nose-dive, but when reality hit, they took off again, climbing all the way to their next layer of resistance before backing down.  When all was said and done for the week, MBS prices had risen 37 basis points.

What Lies Ahead for This Week? 

This week is lacking in economic data with essentially Retail Sales and Jobless Claims (both Thursday), and Consumer Sentiment (Friday) as the only reports that may move the markets.  This week does hold numerous Treasury Auctions with traders’ eyes on the 3-year T-Note, the 10-year T-Note and the 30-year T-Bond, the latter being the more important to mortgage rates. 

When we look at the charts, we see that MBS prices have broken resistance and are poised to keep mortgage rates low, maybe even lower than they are now.  Stochastic indications remain in the overbought spectrum, so a pullback will likely be seen this week, but unless there is a surprise, I doubt they will dip below their 100-day MA.  And speaking of moving averages, we now see the 10-day breaking above the 100-day and while the 50-day is still dropping, the 25-day is climbing quickly.  Overall, there are considerably more positive indications than negative right now for the future. 

The bottom line is that this week will likely see mortgage rates edge slightly higher but then turn lower again.

Leave a Comment

Previous post:

Next post: