Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Tuesday’s bond market has opened in positive territory again as the stock markets show minor losses after disappointing earning results from Dow component Alcoa. The Dow is currently down 14 points, but more importantly has fallen below the 11,000 mark it finally closed above yesterday. The Nasdaq is down 5 points. The bond market is currently up 4/32, which with yesterday’s late strength should improve this morning’s Massachusetts mortgage rates by approximately .250 – .375 of a discount point.
There was economic data posted today but it is not considered to be important to Massachusetts mortgage rates. February’s Goods and Service Trade Balance was posted early this morning, revealing a larger than expected trade deficit of 39.7 billion. Since this data is aged and indirectly affects the bond market, it has had little impact on this morning’s mortgage rates.
Tomorrow’s data is a different story though. The Commerce Department will release March’s Retail Sales data early tomorrow morning. This report gives us a measurement of consumer spending, which is very important because consumer spending makes up two-thirds of the U.S. economy. Forecasts are calling for a 1.2% increase in sales last month. If we see a larger increase in spending, the bond market will probably fall and Massachusetts mortgage rates will rise. However, weaker than expected results could push bond prices higher and mortgage rates lower tomorrow.
March’s Consumer Price Index (CPI) will also be released early tomorrow morning. This index is one of the most important pieces of data we see each month. It measures inflationary pressures at the consumer level of the economy. If inflation is rapidly rising, bonds become less appealing to investors because it erodes the value of their future fixed interest payments. This leads to bond selling and higher Massachusetts mortgage rates. There are two readings in the index that traders watch. The first is the overall reading while the second is the more important core data reading that excludes more volatile food and energy prices. Analysts are expecting to see a 0.1% increase in both readings. If we see larger increases, we could get higher mortgage rates tomorrow.
These reports are both important enough to cause significant movement in Massachusetts mortgage rates. Therefore, if we get conflicting readings, they could offset each other. That could mean little change in rates tomorrow. However, if they both show favorable or unfavorable results, we will likely see a noticeable change in mortgage pricing tomorrow. Therefore, please maintain contact with your mortgage professional 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…
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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