Mortgage Commentary on Massachusetts Mortgage Rate Trends
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Monday’s bond market has opened in positive territory due to early stock weakness and relatively favorable economic news. The stock markets are reacting negatively to overseas news, particularly renewed concerns about Greece. This has caused the Dow to lose 108 points and the Nasdaq to slide 27 points. The bond market is currently up 16/32, which should improve this morning’s Massachusetts mortgage rates by approximately .125 of a discount point.
December’s Personal Income and Outlays data was released early this morning, revealing a 0.5% increase in income and no change in spending. The income reading was slightly higher than expectations, indicating consumers had more money to spend last month than many had thought. However, the good news was that they spent no more than in November, keeping concerns about economic growth to a minimum. Generally speaking, we can consider the report neutral to slightly favorable for bonds and Massachusetts mortgage rates.
Tomorrow has two reports scheduled for release that may influence Massachusetts mortgage pricing. The first is the 4th Quarter Employment Cost Index (ECI) at 8:30 AM ET. It measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. If wages are rising, consumers have more money to spend and business need to raise prices for their services and products. The report is considered moderately important and usually has more of an effect on the bond market than the stock markets. Current forecasts are showing an increase of 0.4%. A lower than expected reading would be favorable to bonds and Massachusetts mortgage rates tomorrow.
January’s Consumer Confidence Index (CCI) will be posted late tomorrow morning. This report is considered to be of moderate to high importance to the bond market and therefore can move Massachusetts mortgage rates. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Due to the significance of consumer spending, market participants are very attentive to related data. Analysts are expecting to see an increase from December’s reading, indicating a higher level of consumer confidence. A reading much smaller than the expected 67.0 would be ideal for the bond market and Massachusetts mortgage rates.
Overall, look for Wednesday or Friday to be the biggest day for Massachusetts mortgage rates. Friday’s Employment report is the most important piece of data, but Wednesday’s ISM Index draws a lot of attention also. If we get weaker than expected results from the ISM and Employment reports, we should see rates close the week lower than last Monday’s opening levels. If the data shows stronger than expected results, we may see Massachusetts mortgage rates move higher for the week. With some very important data being posted over the next several days, I strongly recommend keeping fairly constant contact with your mortgage professional if still floating an interest rate.
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…
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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