Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
This week brings us the release of four pieces of relevant economic news in addition to the minutes from the most recent FOMC meeting. Two of the economic reports are considered to be highly important to the markets and Massachusetts mortgage rates, so we likely will see more movement in rates again this week.
Nothing of importance is scheduled for tomorrow, so look for the stock markets to be a major influence on bond trading and Massachusetts mortgage pricing. If the stock markets open the week with sizable gains, bonds will likely suffer and mortgage rates will probably move higher tomorrow. However, more stock weakness should translate into slightly lower rates tomorrow.
The first report of the week is April’s Producer Price Index (PPI) early Tuesday morning, which helps us measure inflationary pressures at the producer level of the economy. If this report reveals weaker than expected readings, indicating inflation is not a concern at the producer level, we should see the bond and stock markets rally. The overall index is expected to show an increase of 0.1%, while the core data that excludes more volatile food and energy prices is also expected to rise 0.1%. No change or a decline in the core data would be ideal for mortgage shoppers because inflation is the number one nemesis for long-term securities such as mortgage-related bonds leading to higher Massachusetts mortgage rates.
April’s Housing Starts will also be posted early tomorrow morning, but is much less important than the PPI readings are. This data measures housing sector strength and mortgage credit demand by tracking new permits and actual starts of new home construction. It is expected to show an increase in new starts from March’s readings. Since this report is not considered to be of high importance to the bond market, it likely will have little impact on Massachusetts mortgage rates unless it varies greatly from forecasts and the PPI matches forecasts.
Wednesday’s only economic data is April’s Consumer Price Index (CPI) at 8:30 AM ET. It is similar to Tuesday’s PPI report, but measures inflationary pressures at the more important consumer level of the economy. Its’ results will be watched closely and can lead to significant volatility in the bond market and Massachusetts mortgage rates. Current forecasts are calling for a 0.1% increase in the overall index and no change in the core data reading. As with the PPI, the core data is the more important of the two readings.
Also Wednesday will be the release of the minutes from the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation concerns in the economy. The goal is to form opinions about when the Fed may make a move to key short-term interest rates. The minutes will be released at 2:00 PM ET, so if there is a market reaction to them it will be evident during afternoon trading.
The last data comes late Thursday morning with the release of April’s Leading Economic Indicators (LEI) at 10:00 AM ET. This Conference Board report attempts to measure economic activity over the next three to six months. It is expected to show a 0.2% increase from March’s reading, meaning that economic activity is likely rise slightly during the next few months. A decline would be good news for the bond market and Massachusetts mortgage rates, while a larger increase could cause mortgage rates to inch higher Thursday.
Overall, it appears it is going to be another active week for the mortgage market. We have two inflation readings that are very important to the bond market the middle part of the week. Stock market volatility will likely also affect bond trading again this week, so we may see movement in rates several days. Wednesday’s CPI is the single most important report of the week, but Tuesday’s PPI can also heavily influence the bond market. If the stock markets remain fairly calm, I would guess the middle part of the week will probably be the most important for mortgage pricing. However, sizable gains or losses in the major stock indexes could influence bonds and Massachusetts mortgage rates as much as this week’s economic data can. Therefore, this is another week that it is highly recommended you maintain contact with your mortgage professional if still floating an interest rate.
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…
Lock 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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