Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Tuesday’s bond market has opened down slightly with no relevant economic news on tap today and the stock markets in positive ground. The major stock indexes are showing gains with the Dow up 25 points and the Nasdaq up 12 points. The bond market is currently down 3/32, which will likely mean an increase of approximately .250 of a discount point in this morning’s Massachusetts mortgage rates. However, most of this increase is a result of yesterday’s late weakness in bonds and not of this morning’s minor loss.
There is no relevant data scheduled for release today or tomorrow. This likely leaves the bond market, and therefore Massachusetts mortgage rates, to the mercy of the stock markets. If the stock indexes rally again like they did late yesterday, we may see bonds fall and another afternoon increase in mortgage rates. But if they remain near current levels, Massachusetts mortgage rates should follow suit.
There are a couple of key names posting quarterly earnings after the markets close today, including Apple. If they beat analysts’ forecasts, we will probably see stock rise tomorrow and bonds fall. If the corporate earnings fall short of expectations and the stock markets post losses tomorrow, bonds should benefit as investors seek safe-haven from the volatility. That would be good news for mortgage shoppers since it should lead to improvements in Massachusetts mortgage rates.
Thursday morning brings us the release of March’s Producer Price Index (PPI). It will give us an important measurement of inflationary pressures at the producer level of the economy. There are two portions of the report that analysts watch- the overall reading and the core data reading. The core data is more important to market participants because it excludes more volatile food and energy prices. If it shows rapidly rising prices, inflation fears may hurt bond prices since it erodes the value of a bond’s future fixed interest payments, leading to higher Massachusetts mortgage rates. However, a slight increase, or better yet a decline in prices, would be good news for the bond market and mortgage rates. Current forecasts are calling for a 0.5% increase in the overall reading and a 0.1% rise in the core data.
Also Thursday, the National Association of Realtors will post March’s Existing Homes Sales numbers. A similar report to this one and actually the week’s least important data- March’s New Home Sales will be released Friday morning. Both of these releases give us an indication of housing sector strength and mortgage credit demand, but unless they vary greatly from analysts’ forecasts, I don’t think they will cause much movement in Massachusetts mortgage rates. Both are expected to show increases from February’s levels.
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…
Float 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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