Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Wednesday’s bond market has opened in positive territory despite a lack of economic news. The stock markets are showing minor gains with the Dow currently up 15 points and the Nasdaq nearly unchanged from yesterday’s close. The bond market is currently up 9/32, which should improve this morning’s Massachusetts mortgage rates by approximately .125 – .250 of a discount point.
It’s another quiet day in the markets, particularly in bonds. There is no relevant economic data being posted today. The stock markets are being driven mostly by earnings results. But those reports do not directly affect the bond market or Massachusetts mortgage rates. What usually happens is that the earnings news has a significant influence on the stock markets and the bond market tends to move against stocks. So, if earnings news is good stocks usually rise and bonds become less appealing to investors. However, disappointing earnings leads to stock selling and funds shifting into bonds. The problem is that we have not seen the earnings reports lead to a significant move in the major stock indexes. This leaves the bond market with little to drive trading until we get to this week’s economic data.
Tomorrow 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.
Late tomorrow morning, 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.
Also being released tomorrow are the weekly unemployment figures from the Labor Department. They are expected to show 450,000 new claims for benefits were filed last week, down considerably from the previous week. Generally speaking, a higher than expected number of claims would be considered favorable for bonds and Massachusetts mortgage rates. But, this data usually has to bring us a significant surprise to affect mortgage rates. The PPI report is by far the most important of the day and will likely set the tone for bonds and mortgage pricing tomorrow.
If I were considering purchasing or refinancing a home and predicting likely Massachusetts mortgage rates, I would…
Float 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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