Mortgage Commentary on Massachusetts Mortgage Rate Trends
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Thursday’s bond market has opened in negative territory as mixed economic news has stocks in positive ground. The stock markets are showing minor gains at the with the Dow up 11 points and the Nasdaq up 13 points, but pre-market trading hinted at a stronger open for stocks. The bond market is currently down 7/32, which will likely push this morning’s Massachusetts mortgage rates higher by approximately .125 – .250 of a discount point.
There were two monthly reports posted this morning in addition to the weekly employment sector update. The most important of them was December’s Consumer Price Index (CPI) from the Labor Department. They announced that the overall reading was unchanged from November and that the more important core data that excludes volatile food and energy prices rose 0.1%. Both were expected to rise 0.1%. This means that inflationary pressures at the consumer level of the economy remained subdued last month, making the news neutral-to-slightly favorable for bonds and Massachusetts mortgage rates.
December’s Housing Starts was the second monthly report released this morning. The Commerce Department reported that new construction starts of housing fell 4.1% last month, falling well short of forecasts. Analysts were expecting to see a decline, but by more than half of what we saw in the report. This data hints at a weaker housing sector than many had thought. However, this particular report is not considered to be of high importance to the bond market or Massachusetts mortgage rates. Therefore, the impact it has had on today’s pricing unfortunately has been minimal.
The third piece of news was last week’s unemployment figures. The Labor Department said that only 352,000 new claims for unemployment benefits were filed last week. This was sizable decline from the previous week’s revised total of 402,000 and on the surface appears to point towards a strengthening employment sector. On the other hand, the significant volatility we have seen in this data the past couple weeks questions its reliability as an indicator of employment sector strength or weakness. Accordingly, it also has not had too much influence on this morning’s bond trading and Massachusetts mortgage rates.
Overall, today’s data was mixed at best. A more accurate description could be neutral towards bonds and Massachusetts mortgage rates. In fact, half of this morning’s increase in Massachusetts mortgage pricing comes from weakness late yesterday and not today’s news. But since stocks are in positive territory, bonds are showing losses during early trading. However, I would not be completely surprised to see stocks to give up the rest of this morning’s early gains or for bonds to erase their current losses later today. This may lead to an intra-day improvement to Massachusetts mortgage rates this afternoon.
The National Association of Realtors will give us December’s Existing Home Sales report late tomorrow morning. This housing sector report tracks home resales in the U.S. It is expected to show an increase in home sales last month, meaning that the housing sector strengthened. Ideally, the bond market would prefer to see a decline in sales, but a small increase should not negatively affect 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…
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 based on Massachusetts mortgage rate trends. Your individual situation may be different.
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