Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
WEDNESDAY AFTERNOON UPDATE:
Today’s FOMC meeting has adjourned with no change to key short-term interest rates. This was widely expected, but the post-meeting statement did signal a slight change to some of the language of previous meetings. The most significant change was verbiage that the economic recovery was gaining strength, which differed from a more “weak” expectation of the previous post-meeting statements. This means that the Fed believes the economy is moving in the right direction. That can be considered negative news for bonds because it raises inflation concerns that devalue bonds and drives Massachusetts mortgage rates higher.
Before the FOMC announcement, the results of today’s 5-year Note auction were posted. They indicated that the sale was met with mixed results. Some of the indicators used to measure strength were good while others were below average. This leaves many in a neutral position going into tomorrow’s more important 7-year Note auction. I suspect that we will not see an overwhelmingly strong sale, so there is little likelihood of it leading to lower mortgage rates tomorrow afternoon. Accordingly, I am holding a fairly cautious approach towards mortgage rates for the time being.
This afternoon’s events had a negative impact on the bond market and mortgage pricing. The stock markets closed in positive territory with the Dow up almost 42 points and the Nasdaq up 17 points. The bond market closed down 7/32, which should equate to a .250 of a discount point upward revision to pricing. I believe many lenders made some upward change this afternoon, but some may be waiting for tomorrow’s morning pricing to reflect the entire change.
Today’s only factual economic data was the release of December’s New Home Sales late this morning. The Commerce Department reported that sales of newly constructed homes fell 7.6% last month. That was a much larger decline than was expected and helps support the theory that the housing market still has some troubles to overcome. This was basically good news for bonds and Massachusetts mortgage rates but this data is not considered to be highly important, so its impact on this morning’s rates was minimal.
Tomorrow morning brings us the release of December’s Durable Goods Orders. This data helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. The data often is quite volatile from month to month, but is currently expected to show an increase in orders of approximately 2.0%. A smaller than expected increase would be considered good news for bonds and mortgage rates.
If I were considering purchasing or refinancing a home and predicting likely Massachusetts mortgage rates, I would…
Lock if my closing was taking place within 7 days…
Lock if my closing was taking place between 8 and 20 days…
Lock if my closing was taking place between 21 and 60 days…
Float if my closing was taking place over 60 days from now…
This is only a general opinion of what I would do if I were considering whether to lock or float a Massachusetts mortgage based on the current mortgage market. Your individual situation may be different. Contact me if you would like advice for your particular circumstances.
For detailed information on Massachusetts mortgage rates, check out my article, “Massachusetts Mortgage Rates Revealed – How Lenders Determine Mortgage Rates Every Day“.
Copyright : Mortgage Commentary
Geof McLaughlin, better known as The Massachusetts Mortgage Broker, is a nationally acclaimed mortgage professional committed to educating and empowering consumers about all things mortgage through his popular Massachusetts Mortgage Broker blog.
Geof is a top loan originator for one of the country’s leading mortgage companies, Mortgage Master Inc, with a proven reputation of offering its clients the best Massachusetts mortgage rates and lowest closing costs. He can be reached directly at 508.656.0055 or at geof@MAMortgageBroker.com.
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