Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Tuesday’s bond market has opened flat after this morning’s only economic data nearly matched forecasts. The stock markets are showing minor gains with the Dow up 24 points and the Nasdaq up 2 points. The bond market is nearly unchanged from yesterday’s close, but we will still likely see an improvement in this morning’s Massachusetts mortgage rates of approximately .125 of a discount point.
The National Association of Realtors reported late this morning that sales of existing homes fell 0.6% last month, which was very close to forecasts. That indicates that the housing sector remained fairly flat last month because this data tracks approximately 85% of all home sales in the U.S. Since this data is not considered to be highly important to the markets and it showed no significant surprises, its impact on this morning’s bond trading and Massachusetts mortgage rates has been minimal.
We have two reports scheduled for release tomorrow morning. The first is the most important on this week’s calendar, but is not considered to be one of the most important we see each month. The Commerce Department will release February’s Durable Goods Orders early tomorrow morning. It gives us a measurement of manufacturing sector strength by tracking new orders for big-ticket items, or products that are expected to last three or more years. This data is known to be volatile from month to month but is still considered to be of high importance. Analysts are expecting it to show an increase in new orders of approximately 0.6%. A larger increase would be considered negative for bonds as it would indicate economic strength and could lead to higher Massachusetts mortgage rates tomorrow morning.
We also get the sister report to today’s housing data- February’s New Home sales. This report tracks sales of newly constructed homes and usually has less of an influence on bond trading and mortgage rates than today’s Existing Homes Sales report did. In other words, it will take a large variance between its actual readings and forecasts for it to lead to changes in Massachusetts mortgage rates. Current forecasts are expecting a small increase in sales from January’s level.
Also tomorrow is the first of two relatively important Treasury auctions that may also affect bond trading enough to change mortgage rates. There will be an auction of 5-year Notes tomorrow and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into bonds. The buying of bonds that follows usually translates into lower Massachusetts mortgage rates. Results of the sales will be posted at 1:00 PM ET each day, so look for any reaction to come during afternoon hours.
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…
Float 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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