Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Thursday’s bond market has opened flat as investors digest yesterday’s slaughtering of bonds. The stock markets are showing noticeable gains with the Dow up 78 points and the Nasdaq up 20 points. The bond market is up 1/32, but we will undoubtedly see an increase in this morning’s mortgage rates. Just how much of an increase depends on how many times your lender revised pricing yesterday afternoon. Overall, we can expect to see an increase of approximately .500 – .625 of a discount point over yesterday’s Massachusetts morning rates.
The Labor Department gave us this morning’s only economic data with an announcement that 442,000 new claims for unemployment benefits were filed last week. This was lower than thought and can be considered negative news for bonds and Massachusetts mortgage rates, but the truth is that after yesterday’s sell-off, this data drew little interest from traders.
While there is no other relevant economic news being posted today, we do have to watch out for today’s 7-year Treasury Note sale. Results of the auction will be posted at 1:00 PM ET. If investor demand was weak, I would not be surprised to see the bond market move into negative territory his afternoon. However, there is little chance of seeing a sell-off comparable to what we saw yesterday. So, watch for movement later today, but any revisions to Massachusetts mortgage rates will likely be fairly minimal.
Yesterday’s sell-off was an eye-opener for many market participants and traders. There long has been talk of an upward climb in rates once the Fed exits the mortgage-buying side of the game and the economy gains enough traction that inflation becomes a concern again. Is yesterday’s spike in rates an example of what is to come? We don’t know the answer to that quite yet, but it did show just how complacent many people in the market were. That could lead to more knee-jerk reactions to surprising economic results or other factors in the coming weeks that had recently caused little movement.
I personally believe that the size of yesterday’s correction or movement was a little overkill and would not be surprised to see some improvement in Massachusetts mortgage rates from current levels. Before shifting to a more optimistic stance, I would like to see what happens after today’s auction. If the market does not react negatively to its’ results, I will probably shift into that float position, but with an extremely cautious eye and short leash on the market. In other words, I believe there is still room for rates to move higher, but before they do I suspect that they may improve a little.
There are two reports scheduled for release tomorrow. The first is Friday’s final revision to the 4th Quarter GDP. This is the second and final revision to January’s preliminary reading of the U.S. Gross Domestic Product, or the sum of all goods and services produced in the U.S. It is expected to show no change to the reading of 5.9% that was posted last month. Analysts are now more concerned with next month’s preliminary reading of the 1st quarter than data from three to six months ago, so I don’t expect this report to affect Massachusetts mortgage rates much.
The second comes from the University of Michigan at 9:45 AM ET. They will revise their March Consumer Sentiment Index that gives us an indication of consumer confidence. This is relevant because rising levels of confidence usually means consumers are more willing to make large purchases in the near future. That translates into fuel for economic growth. It is expected to show an increase from the preliminary reading of 72.5, meaning that surveyed consumers were more optimistic about their own financial situations than previously thought. Favorable results for bonds and Massachusetts mortgage rates would be a decline in confidence.
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…
Lock 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.
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