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Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-Morning update-July 31, 2013

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:

Wednesday’s bond market has opened in negative territory following stronger than expected economic data and early stock strength. The same economic data is helping to boost stocks this morning, pushing the Dow higher by 113 points while the Nasdaq has gained 19 points. The bond market is currently down 20/32, which will likely push this morning’s mortgage rates higher by approximately .250 – .375 of a discount point over yesterday’s morning pricing.

There were two pieces of economic data posted this morning but the key report came at 8:30 AM when we got the initial reading of the 2nd Quarter Gross Domestic Product (GDP). It showed that the economy grew at an annual rate of 1.7% during the second quarter, exceeding forecasts of a 1.1% increase. This means the economy was stronger during the quarter, making the data negative for the bond market and mortgage rates. Since this report is considered to be the benchmark reading for economic activity and is highly important to the markets, it has caused the bond market to go into selling mode.

The second report of the day was 2nd quarter Employee Productivity and Costs data that revealed a 0.5% increase in worker productivity. This was just a bit higher than analysts were expecting, theoretically making it good news for mortgage rates. However, this was a minor variance in a moderately important report that was released at the same time as the GDP reading, so it has had little impact on this morning’s trading or mortgage pricing.

We also have this afternoon’s adjournment of another FOMC meeting that will likely lead to plenty of volatility in the financial and mortgage markets later today. This is not a meeting that will be followed by a press conference with Chairman Bernanke and is expected to yield no change to key interest rates. Although, there is a lot of speculation that the post meeting statement may clarify the Fed’s position or estimation of when they will begin to slow their current $85 billion monthly bond buying program (QE3). This topic has caused a firestorm in the markets multiple times over the past two months, and not always logically. Therefore, it is difficult to make a prediction of what to expect. Theoretically, we would like to hear something that would hint the Fed will not start tapering their purchases in September as many analysts currently believe.

One would think that since the current consensus has September when the Fed will start, hearing it again would not have a negative impact on the bond market. Unfortunately, logic and history does not seem to be a good indicator on how the markets will react to such news recently. That leaves us little to base a prediction on, other than to hold our breath and hope sanity quickly returns to the markets. The meeting will adjourn at 2:00 PM ET, so the fun should begin mid-afternoon. Look for an update to this report shortly after the markets have an opportunity to react to what is said. There is important economic data set for release tomorrow (ISM manufacturing index), but that will be covered in today’s afternoon revision.

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-End of Day Summary-July 31, 2013

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:

Housing data was plentiful today with both good news and not so good news. Home prices continue to move higher as evidenced by the 12.2% year-over-year gain in the Case/Shiller 20-city Composite Home Price Index. It was the biggest annual gain since March of 2006. From April to May, prices rose 2.4% for the 20-city index.

Over in the foreclosure front, Corelogic reports that completed foreclosures dropped by nearly 20% from June of 2012 (68,000) to June of 2013 (55,000). The 55,000 in June was slightly higher than the 53,000 recorded in May. Since the beginning of this year, foreclosure inventories have declined by 14%. A completed foreclosure occurs when a property is auctioned and results in the purchase of the home at auction by either a third party, such as an investor, or by the lender.

The homeownership rate in the U.S. has now fallen back to levels not seen in two decades and is well below its record high of 69.2% hit back in 2004, currently at 65.1%. During the recent housing crisis, more than 7 million Americans were ripped from their homes after the bubble burst and busted. The rate is expected to fall to 64% due to foreclosures as people enter the rental markets

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-End of Day-July 30, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Tuesday’s bond market has opened in positive ground even though stocks are showing gains also. The Dow is currently up 48 points while the Nasdaq has gained 22 points. The bond market is currently up 5/32, which should improve this morning’s mortgage rates by approximately .125 of a discount point.

The Conference Board gave us today’s only relevant economic data when they posted their Consumer Confidence Index (CCI) for July at 10:00 AM ET. They announced a reading of 80.3 for July that was lower than the 81.6 that was expected and more importantly, a decline from June’s revised reading of 82.1. This means that surveyed consumers were not as optimistic about their own financial situations as many analysts had thought and less than last month. This is good news for the bond market and mortgage rates because waning confidence usually translates into weaker levels of consumer spending that fuels economic growth.

Tomorrow is going to be a very interesting day that will likely be quite volatile for the financial and mortgage markets. It starts with the release of the most relied upon measurement of economic growth at 8:30 AM ET. That report is the preliminary reading of the 2nd Quarter Gross Domestic Product (GDP). It is the total of all goods and services that are produced in the U.S. on a quarterly basis and usually has a great deal of influence on the financial markets. This reading is arguably the single most important report we get regularly. Current forecasts are estimating that the economy grew at a 1.1% annual rate during the second quarter. A faster pace will probably hurt bond prices, leading to higher mortgage rates tomorrow morning. But a smaller than expected reading would likely fuel a bond market rally and lead to lower mortgage pricing since it would indicate the economy was not as strong as many had thought.

The second report of the day will be Employee Productivity and Costs data for the second quarter, also at 8:30 AM ET. It will give us an indication of employee output per hour worked. High levels of productivity are believed to allow the economy to grow without fears of inflation. I don’t see this being a big mover of mortgage pricing, partly because it comes the same time as the GDP reading. Analysts are currently expecting to see an increase in productivity of 0.4%. A large increase in productivity and a decline in costs would be ideal news for mortgage rates, but I suspect that this data will have little impact on tomorrow’s mortgage rates.

The fifth FOMC meeting of the year is a two-day event that began today and will adjourn at 2:00 PM ET tomorrow. This is not a meeting that will be followed by a press conference with Chairman Bernanke. It is expected to yield no change to key interest rates, but there is speculation that the post meeting statement may clarify the Fed’s position or estimation of when they will begin to slow their current $85 billion monthly bond buying program (QE3). This topic has caused a firestorm in the markets multiple times over the past two months, and not always logically. Therefore, it is difficult to make a prediction of what to expect. Theoretically, we would like to hear something that would hint the Fed will not start tapering their purchases in September as many analysts currently believe. One would think that since the current consensus had September as the beginning, hearing it again would not have a negative impact on the bond market. Unfortunately, logic and history do! es not seem to be a good indicator on how the markets will react to such news recently. That leaves us little to base a prediction on, other than to hold our breath and hope sanity quickly returns to the markets.

Regardless, it is safe to assume that it will be an active day in the markets and mortgage rates tomorrow. Key economic data in the morning and then the FOMC meeting in the afternoon significantly raises the likelihood of seeing multiple intra-day revisions to mortgage rates tomorrow. The benchmark 10-year Treasury Note yield is currently at 2.58%, which is above one threshold of 2.49% but well below a significant level of 2.95%. I believe that by tomorrow afternoon’s close we will be either below 2.49% or much closer to the 2.95% than we are today. Since mortgage rates follow bond yields, the latter would be bad news for mortgage shoppers. There is a lot to potentially gain by floating an interest rate into tomorrow’s events, however, there is also plenty of risk.

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

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

The National Association of Realtors (NAR) reported this morning that Pending Home Sales in June declined by 0.4% versus the -1.7% expected. The NAR said that higher home loan rates put a crimp in sales in June. The index hit a six year high in May. Pending Home Sales is a contract that has been signed, but that has not closed.

The trading week kicked off this morning and was met with quiet trading in the absence of any major economic data points other than Pending Home Sales. The rest of the week’s economic calendar offers a plethora of data, which includes, Gross Domestic Product, housing data, the Federal Open Market Committee meeting and culminates on Friday with Non-farm Payrolls.

The regularly scheduled Federal Open Market Committee meeting will begin on Tuesday where members will discuss monetary policy and interest rates and ends with a policy statement on Wednesday at 2:00pm ET. There will be no press conference or economic projections associated with this meeting. The talks will most likely center around whether or not the current Quantitative Easing program will continue through this year or end before the year ends possibly sometime in the fall.

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-Morning Update-July 29, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Monday’s bond market has opened in negative territory, but not by enough to affect mortgage rates. The stock markets are showing minor losses with the Dow down 44 points and the Nasdaq down 5 points. The bond market is currently down 6/32, however, due to a decent closing Friday we should see little change in this morning’s mortgage rates.

There is nothing set for release today that is of relevance to mortgage rates. However, the rest of the week is packed with highly influential economic data and other events that can significantly impact mortgage rates movement. There are seven economic reports that may affect mortgage pricing in addition to another FOMC meeting that certainly has the potential to cause chaos in the financial and mortgage markets. There is important economic data scheduled for release each of the remaining four days, so there is a strong likelihood of seeing noticeable mortgage rate movement several days, with more than including an intra-day revision.

The data kicks off tomorrow when the Conference Board posts their Consumer Confidence Index (CCI) for July at 10:00 AM ET. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. If consumers are more confident in their own financial and employment situations, they are apt to make large purchases in the near future. This is important because consumer spending makes up such a large portion of our economy. If the CCI reading is weaker than expected, meaning that consumers were less confident than thought and likely will delay making a large personal purchase, we may see bond prices rise and mortgage rates drop tomorrow morning. Current forecasts are calling for a reading of 81.6, which would be a slightly higher reading than June’s 81.4 and indicate consumers are a little more comfortable with their finances than they were last month.

Wednesday morning has two reports scheduled (2nd quarter initial GDP reading and Employee Productivity & Costs) and the adjournment of the FOMC meeting that starts tomorrow. The GDP reading is an extremely important report that will be looked at by analysts and traders both here and internationally. Thursday and Friday also have very important releases (ISM manufacturing index and July’s Employment report respectively), so look for plenty of activity the middle and latter days of the week.

Overall, I am expecting to see an extremely active week for the financial markets and mortgage rates. I think that the most important day is either going to be Wednesday due to the GDP release and FOMC adjournment or Friday with July’s employment numbers being posted. The least important day is today since nothing of importance is scheduled. I suspect we will see plenty of movement in not only mortgage rates, but also the financial markets in general this week.

Lake Tahoe Home Loans and Lake Tahoe Mortgage Rates-End of Day Summary-July 26, 2013

Lake Tahoe Home Loans and Lake Tahoe Mortgage Rates:

The country’s largest home loan lender, Wells Fargo, announced this week that it will be laying off 300 workers in its joint venture home lending unit due to new regulatory changes. The bank has withdrawn from eight joint mortgage ventures as state and federal laws have “increased the complexity and difficulty of operating mortgage joint ventures”, a spokesperson said.

Those holding student loans can breathe a sigh of relief today after the Senate passed a bill that would lower the interest rate to 3.9% from 6.8%. The House is now expected to also approve the new measure. Just recently, the rate doubled to 6.8% due to conflicts that developed in Congress. The new rate would apply retroactively for loans taken out after July 1.

The regularly scheduled Federal Open Market Committee meeting will be held next week with a monetary policy statement being released at 2:00pm ET on Wednesday. The policy members will meet to discus interest rates and the state of the U.S. economy. The talk will also revolve around whether or not the Fed should pull back on its current stimulus program of purchasing Bonds in the open market. The program was designed to promote economic growth, lower the unemployment rate and to keep interest rates at low levels.

Home Loan Rates and Mortgage Loan Rates-Morning Update-July 26, 2013

Home Loan Rates and Mortgage Loan Rates:

Friday’s bond market has opened up slightly with stocks showing noticeable losses. The major stock indexes are well in negative territory during early trading. The Dow is currently down 94 points while the Nasdaq has lost 10 points. The bond market is currently up 3/32, but afternoon strength yesterday should improve this morning’s mortgage rates by approximately .125 – .250 of a discount point.

Yesterday’s 7-year Treasury Note auction went a little better than Wednesday’s 5-year Note sale. That news didn’t cause bonds to rally late yesterday, but it did contribute to them erasing their morning losses and moving into positive ground before closing. The rebound from yesterday and this morning’s gains have pushed the yield on the benchmark 10-year Treasury Note down to 2.56%. Unfortunately, as long as it is above 2.50% it is my opinion that the risk of mortgage rates moving upward still remains high. Therefore, please proceed cautiously if still floating an interest rate and closing in the near future.

There was one piece of economic data posted late this morning. The University of Michigan revised their Index of Consumer Sentiment for July just before 10:00 AM ET. They announced a reading of 85.1 that was its highest level in six years, indicating that surveyed consumers were more optimistic about their own financial situations than many had expected. Analysts were calling for a reading of 84.1, which was a slight increase from the preliminary estimate of 83.9 announced earlier this month. Because rising confidence in consumers usually means they are more apt to make a large purchase in the near future that fuels economic growth, we should consider this data negative for the bond market and mortgage rates. However, as expected, the news hasn’t had much of an influence on this morning’s trading or mortgage pricing.

Next week is extremely busy in terms of important economic data and other events that are likely to affect bond trading and mortgage rates. I show seven economic reports currently scheduled to be posted next week, including the initial Gross Domestic Product (GDP) reading for the second quarter, ISM manufacturing index and the monthly Employment report. In addition, we also have another FOMC meeting that will probably cause more volatility in the markets. The mortgage relevant events don’t start until Tuesday morning, so expect any weekend news and last minute portfolio adjustments ahead of the week’s calendar to drive bond trading and mortgage pricing Monday. Look for details on next week’s events in Sunday’s weekly preview.

Tomorrow’s only relevant economic data is the revised reading to July’s University of Michigan Index of Consumer Sentiment just before 10:00 AM ET. This index will help us measure consumer optimism about their own financial situations and is considered relevant because rising consumer confidence usually translates into higher levels of spending, which adds fuel to the economic recovery and is looked at as bad news for bonds. Tomorrow’s release is an update to the preliminary reading we saw two weeks ago, so unless we see a drastic revision to the preliminary estimate of 83.9, I think the markets will probably shrug this news off.

Multi-Directional Indicators-Commentary ~ July 26, 2013

Commentary ~ July 26, 2013

 The first thing to catch our eye this week is that gold, while still well below its value of a year ago, has taken a few sharp upward steps of late. With the dollar weakening slightly against other currencies, we may perhaps conclude that gold is regaining some of its luster as a safe haven alternative for investors who want to protect their wealth. Perhaps we also have a gauge here of the concerns about our economy shared by many investors across the world. (Important questions remains—like whether and how the sequester will end, and when the Fed will drop its support of lower interest rates through the quantitative easing program.)

 Indeed, it seems that we are seeing contradictory indicators, though the strength of the real estate market continues to reassert itself—especially in the New Homes sector. The number of New Home sales in June rose by a striking 8.3% over those selling in the prior month. Meantime, builder confidence, as measured by the NAHB Market Index, rose sharply.

 Still, Existing Home Sales declined by 1.2% from May to June. Bloomberg.com asserted that the spike in mortgage rates, taking them more than 1% higher in less than two months, most likely slowed potential home sales. This does not explain why New Home sales jumped to record highs, but builders at this point have a great deal working in their favor—especially the ability to limit or maximize the number of new homes coming to market, thus managing to control the supply/demand ratio.

 Equally confusing, though, were the figures for new home starts released last week. Analysts looked at the apparent anomaly of obviously rising demand and falling supply and suggested that wet weather had slowed construction starts and, further, much of the slowing involved volatile multifamily home building.

 Since starts for Single-Family Residences fell by only 0.8%, it becomes more plausible that builders are meeting today’s demand very conservatively, unwilling to find themselves overbuilt as was the case several years ago.

 Patrick Newport, of IHS Global Insight, suggested that New Home prices are likely to continue rising in the near future as the industry creates its supply of homes for sale rather slowly. We will very likely continue to find ourselves on an economic roller coaster—as do interest rates-for several more months, at the least. But the underlying trend for an improving real estate market seems to be holding on.

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

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

The Labor Department reported this morning that Americans filing for first time unemployment benefits rose in the latest week, but remained near recent levels as the job markets slowly improve. Weekly Initial Jobless Claims rose by 7,000 in the latest week to 343,000 and just above the 340,000 that was expected. The numbers could be somewhat extorted due to auto plants shutting down for retooling and temporary layoffs related to the end of the regular school year.

Orders for products lasting at least three surged in June due in part to a big increase in aircraft bookings sending Durable Orders up 4.2% in June and the third straight monthly gain. That was above the 1.8% expected. The rise was viewed as a sign that manufacturing is on the rebound and is consistent with two previous manufacturing reports that were positive from the Philadelphia and New York regions.

The major portion of the capital markets are declining today as investors sit back and survey the current economic environment across the nation as Stocks, Bonds and oil prices are all declining. The recent record highs seen in the equity markets have hastened investors to take profits while Bond market players are cutting positions this week on added supply from $99 billion worth of new Treasury securities.

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-Morning update-July 25,2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Thursday’s bond market has opened in negative territory, extending yesterday’s selling. The stock markets are mixed yet again with the Dow down 56 points and the Nasdaq up 10 points. The bond market is currently down 11/32, which should push this morning’s mortgage rates higher by approximately .250 of a discount point.

The Commerce Department reported early this morning that new orders for durable goods or big-ticket products rose 4.2% last month. This was a larger than expected increase, indicating a stronger than predicted manufacturing sector. However, this data is known to be quite volatile from month to month and a secondary reading that excludes higher priced items such as airplanes and other transportation-related orders showed no change from May when analysts had forecasted a small increase. So, even though the headline number showed stronger than expected activity, the data hasn’t really had too much of an influence on this morning’s mortgage rates.

Also posted early this morning was the weekly unemployment update from the Labor Department. They announced that 343,000 new claims for unemployment benefits were filed last week, up from the previous week’s revised total of 336,000. Analysts were expecting to see an increase of 6,000 new claims. The variance wasn’t enough to cause any alarm or joy in the markets. In other words, we can consider the data neutral and uneventful for the bond market and mortgage rates.

Yesterday’s 5-year Treasury Note auction didn’t go very well with several benchmarks we use to gauge investor demand showing relatively weak interest. That doesn’t give us much to be optimistic about in today’s 7-year Note auction. Results will be posted at 1:00 PM ET, so any reaction in the bond and mortgage markets will come during early afternoon trading. Today’s sale is actually more important for mortgage rates because the securities are closer in term to mortgage bonds than yesterday’s sale was. If investor demand was high, we should see the bond market recover some of this morning’s losses, possibly leading to a small improvement in mortgage rates during afternoon hours.

Tomorrow’s only relevant economic data is the revised reading to July’s University of Michigan Index of Consumer Sentiment just before 10:00 AM ET. This index will help us measure consumer optimism about their own financial situations and is considered relevant because rising consumer confidence usually translates into higher levels of spending, which adds fuel to the economic recovery and is looked at as bad news for bonds. Tomorrow’s release is an update to the preliminary reading we saw two weeks ago, so unless we see a drastic revision to the preliminary estimate of 83.9, I think the markets will probably shrug this news off.