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 following favorable economic data and early stock losses. The stock markets initially opened well into negative territory, but have since recovered a good portion of those earlier losses. As the major stock indexes climbed from morning lows, the bond market gave back some of its early gains. Stocks are currently mixed with the Dow down 12 points and the Nasdaq up 2 points. The bond market is currently up 5/32, which should still improve this morning’s Massachusetts mortgage rates by approximately .125 of a discount point.
The Commerce Department reported this morning that new orders for durable goods rose 0.3% last month, falling well short of the 3.0% gain that was expected. In addition, the reading that excludes large transportation-related orders fell 3.8% when it was forecasted to show a small increase. This means that the manufacturing sector was not as strong as expected. Durable goods orders are known to be quite volatile from month to month, so a large headline number doesn’t usually cause much alarm. However, this morning’s readings were enough of a variance from forecasts to add more fuel to the theory that the economy is moving away from a recovery. That is good news for Massachusetts mortgage rates and long-term securities such as mortgage-related bonds.
July’s New Home Sales data was also posted this morning, but it drew much less attention than the Durable Goods report did. It revealed a decline in sales of newly constructed homes when analysts had forecasted a small increase, translating into another measure of housing sector weakness. However, this report is not known to cause much movement in the markets or Massachusetts mortgage rates because it tracks a small portion of all home sales in the U.S. Therefore, its results had little impact on this morning’s bond market and mortgage pricing, leaving the Durable Goods Orders report to drive trading.
Today also brings us the 5-year Treasury Note auction. With the recent concerns about the economy taking center stage and the latest bond rally coming as a result, I would not be surprised to see today’s auction go fairly well, if not better. Tomorrow’s 10-year Note sale is a little closer to the mortgage market than today’s is, but the 5-year sale gives us an idea of what kind of appetite investors have for mid to long-term securities. If the sale goes well today, we can expect a decent interest in tomorrow’s auction. Results of each day’s sale will be posted at 1:00 PM ET. If they go well, we may see strength in bonds during afternoon trading, possibly improving Massachusetts mortgage rates later today.
There is no relevant economic data scheduled for release tomorrow except weekly unemployment figures from the Labor Department. They are expected to say that 485,000 new claims for unemployment benefits were filed last week, which would be a decline from the previous week’s surprise of 500,000. If the number of claims increased last week rather than declined as expected, the bond market should move higher as concerns about the labor market cause stocks to fall. This data usually does not have much of an impact on Massachusetts mortgage rates unless it varies greatly from forecasts, but I suspect traders will react to the report tomorrow if the number of claims did not fall below the important benchmark of 500,000 that were filed the previous week.
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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