Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Thursday’s bond market opened in negative territory but has since recovered those losses. The stock markets are showing relatively minor gains as the Dow is up 36 points and the Nasdaq is up 3 points. The bond market is currently almost unchanged from yesterday’s closing level, but due to strength in bonds yesterday we should see an improvement of approximately .125 of a discount point in this morning’s mortgage pricing.
Today’s only relevant report is the Fed Beige Book at 2:00 PM ET. It details economic activity throughout the country by region. The Fed relies heavily on this data during their FOMC meetings, so look for a potential reaction during afternoon trading. It probably will not cause a major sell off in the stock or bond markets, but could cause enough movement in bond prices to possibly improve or worsen Massachusetts mortgage rates slightly if it reveals any significant surprises.
The first of today’s two relevant reports was the revised 4th quarter Productivity Index. It showed an upward revision to an annual rate of 6.7%. This was higher than the preliminary reading of last month and better than forecasts. That means that employees were more productive in quarter than thought, which is good news for bonds and Massachusetts mortgage rates. This is because the economy can grow easier without inflation concerns when productivity is high.
Also posted this morning was January’s Factory Orders that revealed a 1.7% increase in new orders for durable and non-durable goods. This was close to forecasts, but December’s orders were revised higher by 0.5%. Still, this data has had little influence on this morning’s bond trading and Massachusetts mortgage rates.
The Labor Department gave us last week’s unemployment figures, announcing that 469,000 new claims for benefits were filed last week. This was a sizable drop from the previous week, but nearly matched forecasts. It also has not affected today’s mortgage pricing.
Tomorrow morning brings us one of the most important reports we see each month. It will be the Labor Department that is in the spotlight when they release February’s Employment report at 8:30 AM ET. Some of the important portions of the report will give us the unemployment rate, number of new jobs added or lost and the average hourly earnings reading. The best combination for the bond market and Massachusetts mortgage rates would be an increase in the unemployment rate, a large drop in payrolls and little or no increase in earnings. Current forecasts are calling for 0.1% increase in the unemployment rate to 9.8% and approximately 65,000 jobs lost during the month.
I am remaining extremely cautious towards Massachusetts mortgage rates until this report is behind us. There is some room for improvement in the bond market and mortgage rates, but if this data gives us stronger than expected results, indicating that the employment sector is not as bad as feared, we could see a major sell-off in bonds and a significant spike in Massachusetts mortgage rates. However, much weaker than expected data could fuel a bond market rally and lead mortgage rates lower tomorrow and early next week. Either way, I suspect we will have some volatility in the markets tomorrow.
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.
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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