Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
The Institute for Supply Management (ISM) will post their manufacturing index for April late tomorrow morning. This is one of the first important economic reports released each month and gives us an indication of manufacturer sentiment. A reading above 50 means that more surveyed trade executives felt business improved during the month than those who felt it had worsened. This points toward more manufacturing activity and could hurt bond prices, pushing Massachusetts mortgage rates higher. Analysts are expecting to see a reading of 61.0, which would be an increase from March’s level of sentiment. The lower the reading, the better the news for bonds and mortgage rates.
March’s Factory Orders data is Tuesday’s only relatively important data. It will be released at 10:00AM, giving us a measure of manufacturing sector strength. It is similar to last week’s Durable Goods Orders, except this report includes non-durable goods such as food and clothing. Generally, the market is more concerned with the durable goods orders like refrigerators and electronics than items such as cigarettes and toothpaste. This is why the Durable Goods report usually has more of an impact on the financial markets than the Factory Orders report does. Still, a larger decline than the 0.1% that is expected could push Massachusetts mortgage rates slightly lower. But, a sizable increase in new orders could lead to slightly higher mortgage pricing Tuesday.
There are no relevant reports or events scheduled for Wednesday, meaning non-economic factors such as stock prices will probably have the biggest influence on bond trading and Massachusetts mortgage rates that day. Generally speaking, a stock rally pulls funds from bonds, leading to bond selling and higher mortgage rates. However, stock selling makes bonds more appealing to investors. When the funds are shifted into bonds to escape the volatility in stocks, we often see mortgage rates move lower. If the major stock indexes remain calm Wednesday, Massachusetts mortgage rates should follow suit.
The Labor Department will release its 1st Quarter Productivity and Costs data early Thursday morning. This information helps us measure employee productivity in the workplace. High levels of productivity help allow low-inflationary economic growth. If employee productivity is rapidly rising, the bond market should react favorably. However, a decrease could cause bond prices to drop and Massachusetts mortgage rates to rise Thursday morning. It is expected to show a 2.6% increase in productivity and a 1.0% decline in the labor costs reading.
Friday brings us the release of the almighty monthly Employment report, giving us April’s employment statistics. This is where we may see a huge rally or major sell-off in the bond market and large changes in Massachusetts mortgage rates. The ideal situation for the bond and mortgage markets would be an increase in the unemployment rate and a much smaller number of payrolls added to the economy during the month than was expected.
Just how much of an improvement or worsening in Massachusetts mortgage rates depends on how much variance there is between forecasts and actual readings. This could turn out to be a wonderful day in the mortgage market, but it also carries risks of seeing mortgage rates move higher if the Labor Department posts stronger than expected readings. Current forecasts are calling for the unemployment rate to slip to 9.6% from March’s 9.7% and that approximately 200,000 jobs were added during the month.
Overall, I believe Friday will be the most important day of the week with the employment data being posted. It can easily erase the week’s accumulated gains or losses in Massachusetts mortgage rates if it shows any surprises. We may actually see a noticeable change in rates tomorrow also if its two reports both show favorable or unfavorable results. The middle part of the week will likely be the calmest, but I still suggest proceeding cautiously if still floating an interest rate. This would be a good week to maintain contact with your mortgage professional if you have not locked a rate yet.
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.
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