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Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-End of Day Summary-June 28, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Consumer Sentiment rose in the final weeks of June to 84.1 and more than had been reported at the initial reading halfway through the month and nearly matched the six-year high of 84.5 registered in May. Optimism was seen in the higher-income families. A spokesperson for the survey said that consumers believe the economic recovery has achieved an upward momentum that will not easily be reversed. The Consumer Sentiment Index uses telephone surveys to gather information on consumer expectations regarding the overall economy.

The next big shoe to fall could be in the student loan sector. Interest rates on the loans are set to double on July 1 from 3.4% to 6.8%. Lawmakers on Capitol Hill will be on a recess this week for the 4th of July holiday and the feeling is that something will be done soon after the break. With the weak job market, student loan payments have been harder to keep up with and higher rates could spell more trouble.

The second quarter of the year comes to an end today and believe it or not, 2013 is already half over. Despite the extreme volatility in the markets, Stocks are looking to close out the quarter on a positive note. The closely watched S&P 500 Index rose 2.6% for the quarter, but is down 1.1% in June. Investors started to take profits at the end of May and in June after the Fed hinted that QE III will end sooner rather than later.

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-Morning Summary-June 28, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Friday’s bond market has opened in negative territory with today’s only relevant economic data showing stronger than expected results. The stock markets are mixed with the Dow down 35 points and the Nasdaq up 5 points. The bond market is currently down 7/32, but we may still see a small improvement in rates this morning due to strength in trading late yesterday.

Yesterday’s 7-year Treasury Note auction was received fairly well with several benchmarks we use to gauge investor demand showing a decent level of interest. This contributed to yesterday’s afternoon strength in bonds, leading to many lenders making intra-day improvements to their rate sheets. If your lender improved late yesterday, you may see a slight increase in this morning’s pricing.

Today’s only relevant economic news was the University of Michigan’s revision to their Index of Consumer Sentiment for May. They announced just before 10:00 AM ET this morning that the index was revised to 84.1. Analysts were expecting to see no change from the initial reading of 82.7, meaning that surveyed consumers were more optimistic about their own financial situations than many analysts had thought. That makes the data negative for the bond market and mortgage rates because rising confidence usually translates into higher levels of consumer spending.

Next week will be shortened due to the Independence Day holiday but still has some key economic data scheduled. It starts with the release of this month’s ISM manufacturing index late Monday morning and ends with Friday’s monthly Employment report. There is relevant economic data in between also, along with the holiday Thursday. Look for details on next week’s events in Sunday’s weekly preview.

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-End of Day Summary-June 27, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Americans filing for first time unemployment benefits fell in the latest week as weekly initial jobless claims dropped 9,000 in week ended June 22. That was above the 345,000 expected and has been in the same range for some time now as the jobs market continues to improve. The four week moving average, which smoothes out any seasonal abnormalities, fell 2,750 to 347,750, a five year low.

Inflation remained tame in May as evidenced by the Core Personal Consumption Expenditures (PCE) rising by just 0.1%, inline with estimates. The “Core” PCE price index is defined as personal consumption expenditures (PCE) prices excluding food and energy prices. The core PCE price index measures the prices paid by consumers for goods and services without the volatility caused by movements in food and energy prices to reveal underlying inflation trends.

The National Association of Realtors reported this morning that Pending Home Sales for May rose to their highest level since late 2006. The index jumped 6.7%, well above the 1.5% expected. The recent rise in rates helped in getting potential borrowers off the fence and take the plunge. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-Morning Summary-June 27, 2013

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:

Thursday’s bond market has opened in positive territory even though this morning’s economic data was relatively uneventful. The stock markets are showing fairly sizable gains also with the Dow up 122 points and the Nasdaq up 28 points. The bond market is currently up 9/32, which should equate to an improvement of approximately .375 – .500 of a discount point over yesterday’s morning pricing, partly due to strength in bonds late Wednesday afternoon.

The improvement in bonds and mortgage rates the last two days is encouraging, however, it is too soon to expect a downward trend in rates. There seems to be a pretty strong level of support at 2.50% on the benchmark 10-year Treasury note (currently 2.51%). Until we can fall below that level, it is advised to remain cautious towards mortgage rates if still floating.

The Labor Department gave us last week’s unemployment numbers early this morning, announcing that 346,000 new claims for unemployment benefits were files last week. This was a decline from the previous week but was very close to forecasts of 345,000 and indicates that the employment sector strengthened slightly last week. Therefore, we should consider the data to be neutral for the bond and mortgage markets.

Also released early this morning was May’s Personal Income and Outlays data that showed income rose 0.5% last month and that spending rose 0.3%. These were mixed readings because the increase in income was stronger than expected (0.2%) and the spending reading fell short of the 0.4% that was forecasted. This means that consumers had more money to spend but actually spent less than many had thought. So, we can consider the data neutral to slightly negative simply because the variance on the income reading was wider than the spending.

Later today we will get the results of today’s 7-year Treasury Note auction. Yesterday’s 5-year Note sale didn’t go very well with several indicators that we use to measure investor demand showing lackluster interest. With 5-year and 7-year Notes so close in term, we shouldn’t have high expectations that today’s sale will go any differently than yesterday’s auction did. Generally speaking, strong interest from investors is good news for the bond market and mortgage rates. Results will be posted at 1:00 PM ET today, so any reaction will come during early afternoon trading.

Tomorrow has one report scheduled that is relevant to mortgage rates. It is considered to be moderately important to the broader markets, but can lead to a change in rates if it shows much of a surprise. The University of Michigan will update their Index of Consumer Sentiment for May just before 10:00 AM et tomorrow. This index gives us a measurement of consumer willingness to spend. If consumers are more comfortable with their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data has the potential to affect bond trading and mortgage rates. A downward revision would be considered good news for bonds and rates, but forecasts are calling for little change from this month’s preliminary reading of 82.7.

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-End of Day Summary-June 26, 2013

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:

The U.S. economy received some bad news this morning as the government reported that growth in the first quarter slowed due to a decline in consumer spending and lower business investments. The Gross Domestic Product fell to 1.8% in the final read for the first quarter of 2013, down from the previous reading of 2.4%. There are 3 readings that the Commerce Department releases for quarterly growth and it measures the output of goods and services produced by labor and property located in the U.S.

Due to the recent rise in home loan rates, mortgage application volume has been declining each week. The Mortgage Bankers Association reported today that its Market Composite Index, a measure of loan application volume, fell 3% last week. The rise in rates is due to talk that the U.S. Federal Reserve Bank could begin to decrease its purchases of Bonds each month that was enacted to promote growth through lower interest rates. The refi index declined by 5% while the purchase index rose 2%.

The unemployment picture remains cloudy here in the U.S. currently at 7.6% for the unemployment rate. Federal Reserve Bank of Minneapolis President Narayana Kocherlakota said this morning that he would like the current Bond purchase program to remain intact until such time that the rate falls below 7% for a sustained period. Mr. Kocherlakota is not a voting member of the Federal Reserve this year.

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-Morning Summary-June 26, 2013

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:

Wednesday’s bond market has opened up sharply following some surprisingly weak economic data. The stock markets are showing gains with the Dow up 86 points and the Nasdaq up 22 points. The bond market is currently up 15/32, which should improve this morning’s mortgage rates by approximately .250 of a discount point.

Today’s big news was the second revision to the 1st Quarter Gross Domestic Product (GDP) that showed the economy grew at an annual pace of 1.8% during the first three months of the year. This is the third and final version of the reading that usually has little impact on the markets. However, this was surprisingly weaker than the previous estimate of 2.4% and raises concerns about what this quarter’s reading will show next month. It also underscores my recent comments about whether the sell-off in the bond market was based on speculative economic growth that isn’t really justified.

We also have the first of this week’s two Treasury auctions that have the potential to affect mortgage-related bonds if they show particularly strong or weak investor demand. The Treasury will sell 5-year Notes today and 7-year Notes tomorrow. If they are met with a strong demand, we could see bond prices rise during afternoon trading. This could lead to afternoon improvements to mortgage rates also. But, if the sales draw a lackluster interest from investors, mortgage rates may move higher during afternoon trading.

Tomorrow has two pieces of economic data that we will be watching. The first is the Labor Department’s weekly unemployment update that is expected to show that 345,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week’s 354,000 initial claims, hinting at employment sector strength. Ideally, the bond market would prefer to see an increase in new claims, indicating that the sector weakened instead of strengthened. Since this report tracks only a single week’s worth of initial claims, it often does not affect mortgage rates. But, with so much attention on the Fed’s potential tapering of QE3 and its relation to unemployment, and surprise could have a larger than usually impact on the bond and mortgage markets.

May’s Personal Income and Outlays data is also scheduled for release tomorrow at 8:30 AM ET. This report gives us an indication of consumer ability to spend and current spending activity. They are important because consumer spending makes up over two-thirds of the U.S. economy. If consumer income is rising, they have more money to spend each month. Analysts are expecting to see an increase of 0.2% in income and a 0.4% rise in the spending portion of the report. Declines in both of these readings would be good news for the bond market and mortgage rates.

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-World Investor Confidence Shaky

World Investor Confidence Shaky

 Commentary ~June 26, 2013

Richard Fisher, the President of the Federal Reserve Bank of Dallas [and one of 12 Federal Reserve Bank Presidents], offered these rather bristly comments after the markets reacted so negatively to Fed Chairman Bernanke’s assertion last week that the Fed would “soon” begin to taper off its Quantitative Easing Program, “probably” eliminating it entirely by the middle of 2014 if our economy meets the goals and forecasts recently determined by the Fed.

“I agree fully with the chairman that we should dial back on the stimulus” if “we achieve what the 19 of us forecast,” Fisher said. [12 Federal Bank Presidents plus 7 “Fed” members]

Since we have learned to read between the lines of what Fed officials say, we may be able to infer that there is a concerted effort underway—and certainly not only by Dallas Fed President Fisher—to get us all thinking and talking about the end of the Quantitative Easing program…and, hopefully, moving toward acceptance of its demise, not sweeping it under the carpet.

Such acceptance is not in evidence among world investors, however. Granted, the market reaction to the announcements has eased a bit—but the fear that our government will stop keeping interest rates lower by investing roughly $85 billion a month in purchases of mortgage-backed bonds remains strong. Investors all over the world are fearful that the Fed will send credit markets into a tailspin if it ceases its QE3 program. In other words, a great number of investors around the world believe that the American economy cannot stand on its own feet without being propped up by the government.

This overriding sense of concern—reflected in investor jitters over China’s announcement that it will avoid government stimulus in its current crisis—suggests that all is not well in the world economy…that if we remove the string and Scotch tape now holding things together, we’re in for big trouble.

If this is so, we can understand the Fed’s wish to float the idea that it is pulling out of the business of supporting the economy with massive infusions of just-printed money, and that it expects the world’s markets to help make this next phase work by stepping up to the plate.

We also need American home builders and buyers to score some runs of their own, for it is the real estate sector that appears uniquely ready to support a recovery without the Fed’s constant assistance. By and large the real estate market has come up with the needed energy and strength so far, but it’s clearly time to watch closely. The world’s investors certainly are!

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-End of Day Summary-June 25, 2013

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:

Economic data was plentiful today – first up was a reading on the rise in home prices across the nation. The Case-Shiller 20-City Home Price Index saw its largest monthly gain on record rising by 2.5% from March to April. Since April of 2012, prices rose by 12.1%, the fastest annual pace since 2006. San Francisco had the highest year-over-year gain of nearly 24%, New York was the lowest at 3.2%. The data is from April and it remains to be seen if price appreciation can continue as home loan rates have risen to the mid-4s.

The good news for housing continued tis morning as the Commerce Department reported that New Home Sales rose by 2.1% in May from April to 476,000 units, the highest level since July of 2008. The 476,000 was above the expectaion of 460,000. Since last year this time, sales are up nearly 29%. The recovery is largely due to low home loan rates, which have increased in the past month.

The Conference Board reported this morning that its Consumer Condindence Index rose in June to 81.4, up from 74.3 in May. The Conference Board said that the index has risen for the third consecutive month and is at its highest level since January of 2008. Consumer Confidence measures how optimistic or pessimistic consumers are with respect to the economy in the near future.

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-Morning Update-June 25, 2013

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:

Tuesday’s bond market initially opened in positive territory but has since moved into negative ground after digesting this morning’s economic news. The major stock indexes are showing sizable gains with the Dow up 97 points and the Nasdaq up 16 points. The bond market is currently down 10/32, but due to a nice rally in bonds late yesterday, we should still see a small improvement in this morning’s mortgage rates if comparing to Monday’s morning pricing.

May’s Durable Goods Orders was the first of today’s three reports, revealing a 3.6% increase in new orders at U.S. factories for big-ticket items. This was a bit stronger than the 3.0% that was expected, however, since this data is known to be volatile the amount of the variance was not significant enough to cause any concern. A secondary reading that tracks orders excluding larger more volatile transportation-related products such as new airplanes came in with a 0.7% increase when it was forecasted to fall 0.5%. Therefore, we should consider the news slightly negative for the bond market and mortgage rates. Still, the markets are reacting more to the late morning data than this report.

The second report of the day was May’s New Home Sales report at 10:00 AM ET. The Commerce Department announced a 2.0% rise in sales of newly constructed homes last month. This was stronger than expected, but also not enough to draw much interest from bond traders since it covers such a small percentage of all home sales in the U.S.

June’s Consumer Confidence Index (CCI) was the final report of the day and it is drawing plenty of attention. The Conference Board announced late this morning that their CCI rose to 81.4 this month, exceeding forecasts and its highest reading since January 2008. This means more surveyed consumers felt better about their own financial and employment situations than many had thought. That makes the data bad news for the bond and mortgage markets because rising confidence means consumers are more apt to make large purchases in the near future, fueling economic growth. It is this report that has bond traders concerned this morning and has led to bond’s falling into negative ground.

Tomorrow’s only economic data is the final reading to the 1st Quarter Gross Domestic Product (GDP). The GDP is the sum of all products and services produced in the U.S. and is considered to be the best measurement of economic growth or contraction. However, this particular data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Market participants are looking more towards next month’s release of this quarter’s initial GDP reading. Last month’s first revision showed a 2.4% rise in the GDP, which is what analysts are expecting to see again. An increase would be considered negative for rates as it means stronger economic activity.

Tomorrow also has the first of this week’s two Treasury auctions that have the potential to affect mortgage-related bonds if they show particularly strong or weak investor demand. The Treasury will sell 5-year Notes tomorrow and 7-year Notes Thursday. If they are met with a strong demand, we could see bond prices rise during afternoon trading. This could lead to afternoon improvements to mortgage rates also. But, if the sales draw a lackluster interest from investors, mortgage rates may move higher during afternoon trading.

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-End of Day Summary-June 24, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Stocks and Bonds are both moving lower to start the last week of the month and as the 2nd quarter ends this Friday. The hint that the U.S. Federal Reserve will begin to start easing back on its current stimulus program, dubbed QE III, has investors in both asset classes selling securities at a fast clip. The yield on the 10-Year T Note has risen to 2.63% from the 1.63% recorded on May 1, while in that same time, the closely watched S&P 500 Index went from 1,687 to the current level of 1,568.

Over in the housing markets, Lender Processing Services reports that home prices rose 1.5% from April to May and are up 8.1% since last year this time, the mortgage analytics firm said. The average price is up to $217,000, up 4.5% from the beginning of 2013, but below the $265,000 recorded in June of 2006. The report went on to say that every one of the 20 largest U.S. States saw rising home from March to April.

This week the economic calendar really heats up with readings on housing, inflation, GDP, consumer confidence and sentiment. In addition, the Treasury will sell a total of $99B in 2, 5 and 7-Year Treasury Notes this week beginning on Tuesday. Earnings season is set to kick off in a few weeks as investors will be able to gauge the financial health of U.S. companies.