Mortgage Commentary on Massachusetts Mortgage Rate Trends
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Wednesday’s bond market has opened in positive as stocks extend yesterday afternoon’s selling. The stock markets are showing sizable losses with the Dow down 120 points and the Nasdaq down 41 points. The bond market is currently up 12/32, which with yesterday’s late gains should improve Massachusetts mortgage rates by approximately .250 of a discount point from yesterday’s morning pricing.
There is no relevant economic data scheduled for release today, so look for stocks to drive bond trading during morning hours. The 30-year Bond auction will take place today, but it will affect afternoon trading. Yesterday’s strong 10-year Note sale gives us reason to be optimistic about today’s sale. If it is met with similar demand, we could see bonds improve this afternoon and possible have another intra-day downward revision to Massachusetts mortgage pricing. Results of the sale will be posted at 1:00 PM ET, so any reaction to the auction results will come after that point in the day.
Tomorrow has three economic reports scheduled for release, but one of them is much more important than the other two. The most important is November’s Producer Price Index (PPI) at 8:30 AM ET. This Labor Department report measures inflationary pressures at the producer level of the economy. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. If tomorrow’s release reveals stronger than expected readings, indicating that inflationary pressures are rising, the bond market will probably react negatively and drive Massachusetts mortgage rates higher. If we see in-line or weaker than expected numbers, the bond market should respond well and Massachusetts mortgage rates should fall. Current forecasts are showing a 0.1% increase in the overall index and a 0.1% rise in the core data.
The second report of the day will be last week’s unemployment figures. The Labor Department is expected to say that 390,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week’s surprising 381,000 new claims and would hint at a weakening employment sector. However, the data is usually not a major factor in bond trading or Massachusetts mortgage pricing unless it shows a significant change because the report tracks only a single week’s worth of new claims.
November’s Industrial Production data is also scheduled to be posted tomorrow morning, but a little later than the first two. This report gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. Analysts are expecting it to show a 0.2% increase in output, indicating modest manufacturing growth last month. A smaller than expected rise would be good news for bonds, while a stronger reading may result in slightly higher Massachusetts mortgage pricing. However, the PPI release is the most influential report of the three and will likely have the biggest impact on Massachusetts mortgage rates tomorrow.
Lock or Float Advice based on Massachusetts Mortgage Rate Trends
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…
Lock 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 based on Massachusetts mortgage rate trends. Your individual situation may be different.
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