Mortgage Commentary on Massachusetts Mortgage Rate Trends
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Friday’s bond market has opened in negative territory again following a mixed open in stocks and stronger than expected economic data. The Dow is showing strength with a gain of 54 points, but the Nasdaq is down 5 points. The bond market is currently down 10/32, which with yesterday’s late weakness should cause this morning’s Massachusetts mortgage rates to rise by approximately .125 of a discount point.
Yesterday’s morning trading pattern didn’t hold during afternoon hours. The bond market lost ground instead of improving from where it was at pricing time. This led some lenders to revise rates higher during afternoon trading, but some may have opted to wait until today to reflect the change. Today’s early losses puts the benchmark 10-year Note yield above 2.00% again, so it will be interesting to see which way we move. If 2.00% is a level of resistance, we should see bond prices move higher and the yield fall below in the immediate future. This would mean that we should see Massachusetts mortgage rates improve also.
There was only one piece of economic data released this morning. That was December’s Existing Home Sales report from the National Association of Realtors late this morning. It showed an increase in home resales last month of 5.0%, exceeding forecasts. This is a sign that the housing sector was stronger than expected in December, making the data unfavorable for bonds and Massachusetts mortgage rates. Bonds tend to fair better in weaker economic conditions, so signs of economic strength translates into weaker bonds and higher Massachusetts mortgage rates.
Next week brings us several important events that may influence the financial and mortgage markets. In addition to a handful of economic reports (one of which is arguable the single most important report), we also have the first FOMC meeting of the year, two semi-relevant Treasury auctions and the President’s State of the Union address Tuesday evening. There is nothing of importance scheduled for Monday, so the safe bet is on stocks and/or news from over the weekend to drive bond trading and Massachusetts mortgage rates. Look for details on next week’s calendar in Sunday’s weekly preview.
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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