Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Tuesday’s bond market has opened in negative territory after the two more important economic reports of the morning revealed stronger than expected results. The stock markets are reacting favorably to the news with the Dow up 54 points and the Nasdaq up 20 points. The bond market is currently down 13/32, which will likely push this morning’s Massachusetts mortgage rates higher by approximately .125 of a discount point.
The first of this morning’s three reports was July’s Producer Price Index (PPI). The Labor Department said that the overall PPI rose 0.2% last month, as it was expected to. The bad news came in the more important core data reading that rose 0.3% when forecasts had called for only a 0.1% rise. This means that prices at the producer level of the economy rose more than expected when volatile food and energy costs are excluded. The larger than expected increase indicates that inflation was stronger than thought at the producer level. The concern is that those costs will be passed onto the consumer in the near future, fueling inflation at the consumer level of the economy which is negative news for Massachusetts mortgage rates.
July’s Housing Starts was also posted early this morning, but it gave us favorable results. The Commerce Department said that starts of new home construction rose last month, but the number of units was fewer than analysts had forecasted. This means that new home construction strengthened slightly last month, but at a slower pace than thought. Unfortunately, the other two reports of the morning were much more important to the markets than this was. Therefore, it has had a minimal impact on today’s Massachusetts mortgage rates.
The final report of the morning was July’s Industrial Production. It revealed an increase of 1.0% in output at U.S. factories, mines and utilities. This was a much stronger than the 0.6% increase that was expected and means that manufacturing activity was stronger than thought last month. That news is considered negative for bonds and Massachusetts mortgage rates because a strengthening manufacturing sector makes a broader economic recovery more likely.
There is no relevant economic data scheduled for release tomorrow, so look for the stock markets to have the biggest influence on bond trading and Massachusetts mortgage rates. I would not be surprised to see further gains in the major stock indexes, so please proceed cautiously if still floating an interest rate.
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.
Written by Geof McLaughlin
Topics: Massachusetts Mortgage Rate Trends