Your Daily Mortgage Commentary & Rate Lock Advice for Massachusetts Mortgage Rates
Courtesy of the Massachusetts Mortgage Broker
Thursday’s bond market has opened in negative territory again as yesterday’s sell-off extends into this morning’s trading. The stock markets are showing relatively minor gains with the Dow up 18 points and the Nasdaq up 15 points. The bond market is currently down 11/32, which should push this morning’s Massachusetts mortgage rates higher by approximately .125 – .250 of a discount point.
None of today’s three reports showed a surprise significant enough to affect Massachusetts mortgage rates. The revised 2nd Quarter Productivity reading revealed a 1.8% decline. This was slightly weaker than the 1.7% decline that was forecasted, but was not enough of a variance to affect bond trading or mortgage rates. The Labor Department reported that 472,000 new claims for unemployment benefits were filed last week when 475,000 were expected. As with the productivity reading, this was not enough of a difference to influence this morning’s mortgage pricing.
July’s Factory Orders report was released late this morning, showing a 0.1% increase in new orders for durable and non-durable goods. Analysts were expecting to see a 0.3% increase, so at first look this data can be considered good news for bonds and Massachusetts mortgage rates because it indicates weaker than expected manufacturing activity. However, a significant upward revision to June’s orders offset July’s news, creating a neutral impact on this morning’s trading.
The Labor Department will be in the spotlight tomorrow morning when they post July’s Employment report. It will give us the U.S. unemployment rate, number of new jobs added or lost and average hourly earnings for August. The ideal scenario for the bond market and Massachusetts mortgage rates are rising unemployment, a larger than expected drop in payrolls and earnings to remain unchanged. Analysts are expecting to see that the unemployment rate moved from 9.5% to 9.6% and that 120,000 jobs were lost during the month. Weaker then expected readings would be very good news for bonds and would likely lead to lower mortgage rates tomorrow. However, if we get stronger than expected numbers, Massachusetts mortgage rates will probably spike higher.
Tomorrow’s report is arguably the most important release that we see each month. The initial GDP reading can be considered the single most important overall, but it is posted quarterly. Therefore, we can expect to see some volatility in the markets and with Massachusetts mortgage rates after tomorrow’s release. This is especially true during early morning hours as traders make a knee-jerk reaction to its results. Add in the fact that the markets will be closed Monday in observance of the Labor Day holiday, which means that some traders may be heading home early tomorrow, and we have the potential for a very interesting day in the mortgage market. Therefore, proceed cautiously 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…
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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