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 the release of much weaker than expected economic data. The stock markets are mixed with the Dow is currently down 16 points and the Nasdaq up 5 points. The bond market is currently up 7/32, but due to weakness late yesterday we will likely see little change in this morning’s Massachusetts mortgage rates.
Today’s big news was June’s Retail Sales report that showed retail level sales fell 0.5% last month. This was weaker than the 0.2% decline that was expected and indicates that consumers spent less than thought. That is good news for the bond market because consumer spending makes up two-thirds of the U.S. economy. If spending is slowing, broad economic strength is not likely, keeping inflation concerns to a minimum.
Later today we will get to see the minutes from the last FOMC meeting. There is a possibility of the markets reacting to them following their 2:00 PM ET release, especially if they show some divisiveness by its members during discussion and voting at the last meeting or give any indication of the Fed’s possible next move with monetary policy. This could lead to changes in Massachusetts mortgage rates this afternoon.
Yesterday’s 10-year Treasury Note auction was considered average at best. Most of the readings used to measure demand did not show much strength, leading to weakness in trading late yesterday. Today brings us the 30-year Treasury Bond sale and its results will also be posted at 1:00 PM ET. If it was met with an overly strong demand from investors, particularly international buyers, we should see bond strength during afternoon trading as long as the FOMC minutes don’t give us negative surprises. However, today’s sale is less important to mortgage rates than yesterday’s was, so I suspect it will take a very strong auction for this sale to improve Massachusetts mortgage rates this afternoon.
There are two relevant reports scheduled for release tomorrow. The first is June’s Producer Price Index (PPI). It is a very important release because it measures inflationary pressures at the producer level of the economy. It is expected to show a 0.1% decline in the overall reading and a 0.1% increase in the core data reading. The core reading is the more important of the two because it excludes more volatile food and energy prices. The bond market should react quite favorably if we get weaker than expected readings, but a larger than expected rise in the core reading could send Massachusetts mortgage rates higher tomorrow.
June’s Industrial Production data will be the second report tomorrow. This data measures output at U.S. factories, mines and utilities, giving us an indication of manufacturing sector strength. It is expected to show no change in the level of production, indicating that the manufacturing sector remained stable during the month. That would basically be good news for bonds, however, an unexpected decline would likely help improve rates if the PPI showed favorable results.
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 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.
Comments Closed