Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
WEDNESDAY AFTERNOON UPDATE:
This week’s FOMC meeting has adjourned with no change to key short-term interest rates. This was widely expected and has not affected the markets or Massachusetts mortgage rates. The post-meeting statement did help influence opinions and bond trading. One of the points of interest was a comment that said the “economic recovery is proceeding” which differed slightly from the previous meeting that said economic activity continued to “strengthen.” Traders are taking that to mean the economic recovery is at a slower pace than previously thought.
The Fed indirectly indicated that concerns about Europe could affect that recovery, but said that they don’t expect that it to push the U.S. economy back into a recession. They also said that inflation remains subdued, which means there is no pressure to raise key rates anytime soon.
Overall, the lack of a change to rates has had no impact on the markets or Massachusetts mortgage rates, but the post-meeting statement was taken as favorable for the bond market. The lack of concern about inflation and the more cautious remarks on the status of our economic growth makes long-term securities such as mortgage-related bonds more attractive to investors.
The stock markets have changed little from their pre-announcement levels with the Dow up a couple of points and the Nasdaq still down a few points. The bond market is currently up 18/32, but I don’t think we will see a change to mortgage rates this afternoon since bonds had slipped slightly from morning highs before the 2:15 PM ET announcement. The bond market has improved slightly from its 2:15 PM level, but is still below where it was when Massachusetts mortgage rates were posted this morning.
May’s New Home Sales from the Commerce Department was today’s only relevant economic report. It revealed a whopping decline of 33% in sales of newly constructed homes, pushing sales levels down to record lows. This further indicates that the tax credits being offered to homebuyers were heavily supporting the housing market. That raises significant concerns about the growth ability of the housing sector now that they are expiring. This data is favorable news for the bond market and Massachusetts mortgage rates because a weakening housing sector will make a broader economic recovery more difficult and eases inflation concerns. Today’s data usually has little impact on trading and mortgage rates, but the size of decline has allowed the news to influence this morning’s rates.
The only important release scheduled for tomorrow is May’s Durable Goods Orders, which gives us an indication of manufacturing sector strength. It is known to be quite volatile from month to month and is expected to show a decline of 1.3% in new orders from April to May. A larger decline would be the ideal scenario for the bond market and could lead to a decline in Massachusetts mortgage rates tomorrow.
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