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 after news of a large drop in home sales. The stock markets are reacting negatively to the news with the Dow down 81 points and the Nasdaq down 22 points. The bond market is currently up 18/32, which should improve this morning’s Massachusetts mortgage rates by approximately .250 of a discount point.
The National Association of Realtors announced late this morning that home resales fell to a 15-year low last month. The 27.2% decline in sales of existing homes was well short of expectations and indicates that the housing sector needs more stimulus to stabilize. Whether or not Congress will allow it remains to be seen, but it is apparent that the housing sector is weak. That is good news for the bond market and Massachusetts mortgage rates because a soft housing market makes a broader economic recovery much less likely.
Tomorrow brings us the release of two relevant economic reports. The Commerce Department will post July’s Durable Goods Orders early tomorrow morning, giving us an important measure of manufacturing sector strength. This data tracks orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. A much weaker reading than the expected 3.0% rise that is expected would indicate that the manufacturing sector is not as strong as thought. This would be good news for bonds and should lead to lower Massachusetts mortgage rates tomorrow morning.
Also scheduled for release tomorrow is July’s New Home Sales data. This report is the least important release of the week. It will give us another indication of housing sector strength and mortgage credit demand, but only tracks approximately 15% of all home sales. It usually doesn’t have a major impact on bond prices or Massachusetts mortgage rates unless it varies greatly from forecasts.
The first of this week’s Treasury auctions that may affect bond trading and Massachusetts mortgage rates is tomorrow. 5-year Notes will be sold tomorrow and 7-year Note will be auctioned Thursday. Results of the sales will be posted 1:00 PM ET each day. If investor interest is strong in the auctions, we can expect the broader bond market to rally and mortgage rates to move lower. However, lackluster demand could lead to bond selling and higher Massachusetts mortgage rates tomorrow and Thursday afternoon.
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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