Massachusetts mortgage rate advisory

Massachusetts Mortgage Rate Lock Advisory: Even More Historic Lows!

by Rich Vetstein on September 1, 2010

in Mortgages

Mortgage Guy, Brian Cav, is back with his Massachusetts weekly mortgage rate report.

Mortgage Rates hit new lows yesterday. If you have refinanced over the past 2 years there is a 70% chance you can refinance to 0.5% lower in rate and pay NO closing costs. The 30 year fixed mortgage rate has fallen down to the  4.25% to 4.375% range for well-qualified borrowers. Can you say high 3.875%,  30 year fixed rate paying points?!?!  These rates are amazing and may not be down this low again, I would take the safe play and LOCK in your purchase or refinancing application right now. Please call/email it only takes you 5 minutes to LOCK in at today’s new all-time low rates.

Inquire within for current Mortgage Rates or guidelines [email protected] 617.771.5021

Economic Data

Wednesday’s bond market has opened down sharply after this morning’s economic data showed surprising strength. The stock markets are heavily influencing bond trading with significant gains. Stocks have had quite a strong reaction to this morning’s news, pushing the Dow up over 230 points and the Nasdaq up. The bond market is currently down, which will likely push this morning’s mortgage rates higher by approximately .250 of a discount point. Strength in bonds late yesterday is helping to prevent a larger increase to this morning’s rates.

Today’s news came from the Institute for Supply Management (ISM), who released their manufacturing index for August late this morning. They announced a reading of 56.3 that was not only well above forecasts, but also an increase from July’s reading. This means that manufacturer sentiment about business conditions was much stronger than analysts had expected. When this happens, bonds tend to move lower and stocks higher as it is a sign of economic strength.

Yesterday afternoon’s release of the minutes from the last FOMC meeting didn’t reveal any significant surprises, but did indicate that the Fed is considering, or at least willing to invest more funds into mortgage-related securities. That can be considered good news for bonds and mortgage rates since the additional buying should drive mortgage pricing lower. However, it is just a thought at this time and cannot be given much weight until the Fed does decide to pursue that route.

There are two reports scheduled for release tomorrow morning that have the potential to influence rates. The first is the revised 2nd Quarter Productivity numbers, which measures employee productivity in the workplace. Strong levels of productivity allow the economy to expand without inflation concerns. It is expected to show a downward change from the previous estimate of a 0.9% decline. Forecasts are currently calling for a 1.7% drop, meaning productivity was weaker than previously thought. This would be negative news for the bond market and mortgage rates, but this data is not one of the more important reports we see each quarter. Therefore, unless there is a large variance from expectations, this report will likely have little impact on tomorrow’s rates.

July’s Factory Orders data will also be released tomorrow morning. This report measures manufacturing sector strength and is similar to last week’s Durable Goods Orders, but includes orders for both durable and non-durable goods. It is expected to show a 0.3% increase in new orders. A smaller than expected rise would be favorable for bonds, while a large than forecasted increase could lead to higher rates tomorrow morning.

Also worth noting are weekly unemployment figures that will be released by the Labor Department early tomorrow morning. They are expected to say that 475,000 new claims for unemployment benefits were filed last week. Since this data tracks only a single week’s worth of claims, it usually takes a fairly significant surprise for mortgage rates to react. This is especially true when monthly figures will be posted the following day, as is the case this week.

FLOAT or  LOCK

If I was closing on a Home Mortgage in the next 0 to 15 Days – LOCK

If I was closing on a Home Mortgage in the next 15 to 30 Days – LOCK

If I was closing on a Home Mortgage in the next 30 to 60 Days – LOCK

If I was closing on a Home Mortgage in the next 60+ FLOAT

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

  • Are you a possible Massachusetts First Time Homebuyer?
  • Do you have a Real Estate client inquiring about current Mortgage Rates?
  • Do you have any Refinancing questions?
  • Should you be thinking about Refinancing out of your ARM (Adjustable Rate Mortgage)?
  • Have your Real Estate clients been Pre Approved?

[email protected] 617.771.5021

Credit: Bloomberg, Yahoo Finance, Mortgage News, MBS Quoteline, WSJ, NY Times

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Guest Post: Massachusetts Mortgage Rate Advisory Weekly Report

by Rich Vetstein on March 18, 2010

in Mortgages

I’m pleased to welcome mortgage professional Brian Cav, the creator of a great mortgage blog called Smarterborrowing.com. Brian was nice enough to give us his weekly mortgage rate report which I’m sure you’ll find interesting.

Mortgage Market

How did the FOMC meeting affect mortgage rates? Pricing actually got a bit better, both benchmark treasury yields and MBS prices improved after the FOMC statement was released. 30 year conventional mortgage rates are in the 4.75% to 5.125% for well qualified borrowers. If you are presently being quoted these mortgage rates and are closing in the next 15 to 45 days I like LOCKing these rates in. Could this small rally extend?

Economic Data

Yesterdays FOMC meeting has adjourned with an announcement of no change to key short-term interest rates. This was widely expected, but the post-meeting statement did cause some discussion. The Fed left the language in the recent statements that indicate that rates will remain near current levels for some time. This is good news for the bond market and mortgage rates as it means that the Fed is still concerned about an economic recovery.

There is little doubt that the Fed has to raise rates sometime in the future. The question is when. Some analysts feel that it has to be sooner than later to prevent other economic issues down the road. The ultimate goal is for the economy to gradually strengthen so Mr. Bernanke and company can slowly raise interest rates. Raising rates too soon could dampen economic activity by making borrowing more expensive for businesses and consumers. However, waiting too long to raise them could let inflation build momentum, leading to a rapid increase in key rates that also undermines economic growth.

Yesterday’s statement pretty much reiterated recent ones that hint the increases will be later than sooner. Some market analysts believe that is a mistake and that rates need to be raised this year. Others think the employment and housing sectors are still too weak to start raising rates. Who is correct? The future will show us, but in the meantime the debate will continue.

The bond and stock markets have improved from where they were before the statement was released. I would not be surprised to see a small downward revision to mortgage rates shortly as a result of the bond market strength. However, many lenders may opt to wait until tomorrow morning’s rates to reflect that improvement.

February’s Housing Starts was this morning’s only relevant economic data. The Commerce Department reported that construction starts of new homes fell 5.9% last month. This data is not considered to be greatly important to the markets or mortgage rates, so its impact on this week’s trading has been / will be minimal.

LOCK / FLOAT

If I was closing on a Home Mortgage in the next 0 to 15 Days – LOCK/FLOAT

If I was closing on a Home Mortgage in the next 15 to 30 Days – LOCK

If I was closing on a Home Mortgage in the next 30 to 60 Days – LOCK

If I was closing on a Home Mortgage in the next 60+ FLOAT

This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.

[email protected] 617.771.5021

Credit: Bloomberg, Yahoo Finance, Mortgage News, MBS Quoteline

Thanks Brian! Hopefully, you’re weekly report will be a regular feature here on the Blog.

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