Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Friday’s bond market has opened in negative territory after this morning’s employment data gave us mixed results. The stock markets are experiencing quite a bit of volatility this morning fluctuating between positive and negative ground. They initially opened with respectable gains after yesterday’s 347-point drop in the Dow, but quickly gave them up before moving higher yet again. They are currently well in negative territory with the Dow down 91 points and the Nasdaq down 41 points.
The bond market initially appeared to be ready to give back a good part of yesterday’s gains. It traded in negative ground overnight and even after this morning’s data was posted it remained there. However, it seems to be slowly erasing these losses as the morning trading session continues. After being down 14/32 earlier, it is currently down only 5/32. We will still likely see an improvement of approximately .250 – .375 of a discount point in this morning’s Massachusetts mortgage rates though due to strength late yesterday as stocks slid. If the stock markets continue to fall, bonds should improve enough to possibly revise mortgage rates lower this afternoon.
The Labor Department was in the spotlight again this morning when they posted April’s employment statistics. They announced that the unemployment rate rose to 9.9% last month when it was expected to remain at 9.7%. This was the part of the report that was good for bonds and Massachusetts mortgage rates. The bad news came in the payroll numbers that showed that 290,000 jobs were added to the economy during the month that was the largest monthly addition since March 2006. Analysts had forecasted only 187,000 new jobs, indicating that the employment sector was hiring more than thought. Today’s report also revealed an upward revision of 68,000 jobs to March’s previously announced total, meaning that 573,000 new payrolls have been added to the economy so far this year.
Overall, the data supports both theories about the strength and recovery of the economy. On one hand, the unemployment rate nearly touched the 10.0% benchmark that the Fed itself has indicated is a possibility. That hints that there may be room for the figure to move even higher. But, the job growth is fairly impressive and puts us on a pace for strong job growth for the year if the current rate continues. During the first few minutes of trading it seemed that the markets couldn’t quite decide if this data is worth adding or selling holdings. Now it seems that with the overseas financial crisis still looming, we could see more weakness in stocks today. Holding out for an improvement to rates later today may be a safe bet, but I still think that we are due for a correction in bonds that would bring Massachusetts mortgage rates off their current lows. So, please proceed cautiously if still willing to gamble on mortgage rates.
Next week is relatively active with a handful of relevant economic reports schedule and two important Treasury auctions set. There is no relevant data scheduled for release Monday or Tuesday, so I am expecting any weekend news on the financial situations overseas and the stock markets to drive bond trading and Massachusetts mortgage rates those days. Look for details on next week’s relevant events in Sunday’s weekly preview.
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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