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Lake Tahoe Mortgage Rate Trends- December 31, 2014

Wednesday’s bond market has opened in positive territory following the release of a bit of favorable economic news. The stock markets are showing minor gains during early trading with the Dow up 37 points and the Nasdaq up 11 points. The bond market is currently up 4/32 (2.17%), but I don’t believe that is enough to see an improvement in this morning’s mortgage rates.

Last week’s unemployment figures was the only relevant economic report posted this morning. Their 8:30 AM ET release revealed that 298,000 new claims for unemployment benefits were filed last week. That was a sizable increase from the previous week’s revised 281,000 initial claims and indicates the employment sector weakened last week. That is good news for the bond market and mortgage rates, but considering this is only a weekly figure and there was a significant holiday in that period, the impact this news has had on today’s markets is fairly minimal.

The bond market will close at 2:00 PM ET today ahead of the New Year’s Day holiday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed tomorrow for the holiday and will reopen Friday morning for regular hours. Due to the early close this afternoon, I would not be surprised to see bonds get a little active with lighter than normal volume and year-end position trades being made. That doesn’t mean we are in store for a noticeable change in mortgage rates later today. It simply means we could see a slight revision if the markets do move.

After the holiday, the Institute for Supply Management (ISM) will post their manufacturing index for December at 10:00 AM ET Friday morning. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. That indicates manufacturing sector strength rather than contraction. Analysts are currently expecting to see a 57.5 reading in this month’s release, meaning that sentiment softened from November’s 58.7. A smaller reading will be good news for the bond market and mortgage shoppers, while a higher than expected reading could lead to an increase in mortgage rates Friday morning as it would point towards a stronger manufacturing sector.

Lake Tahoe Mortgage Rate Trends- December 30, 2014

Tuesday’s bond market has opened in positive territory due to early stock selling and weaker than expected economic data. The major stock indexes are showing relatively minor losses but the 52 point drop in the Dow is enough to fall below 18,000. The Nasdaq is down 15 points. The bond market is currently up 10/32 (2.17%), which should improve this morning’s mortgage rates by approximately .125 – .250 of a discount point over yesterday’s morning pricing.

This morning’s only relevant economic data was December’s Consumer Confidence Index (CCI) from the Conference Board at 10:00 AM ET. The announced a reading of 92.6 that fell short of expectations and indicates consumers were a little less optimistic about their own financial situations than many had thought. That is good news for the bond and mortgage markets because higher levels of confidence means consumers are more likely to make a large purchase in the near future. An upward revision to November’s reading means confidence was higher that month than previously thought, but we still can consider this morning’s report as slightly favorable for mortgage rates.

Tomorrow’s only data worth watching is the release of last week’s unemployment figures at 8:30 AM ET. This report is usually posted Thursday mornings but is coming tomorrow due to the holiday Thursday. It is expected to show that 290,000 new claims for unemployment benefits were filed last week, up from 280,000 of the previous week. The higher the number of claims, the better the news it is for bonds and mortgage rates because rising initial claims is a sign of a weakening employment sector.

The bond market will close at 2:00 PM ET tomorrow ahead of the New Year’s Day holiday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed Thursday for the holiday and will reopen Friday morning for regular hours. As a result of the holiday schedule, we should see another round of lighter than normal trading. The thinner trading allows the indexes and bond prices to move more than they normally would with little data.

Lake Tahoe Mortgage Rate Trends- December 29, 2014

Monday’s bond market has opened in positive territory with stocks starting the final week of the year flat and no economic data to drive trading. The Dow and Nasdaq are both nearly unchanged from Friday’s close. The bond market is currently up 10/32 (2.21%), which should improve this morning’s mortgage rates by approximately .125 of a discount point from Friday’s morning pricing.

There is nothing scheduled to be posted today that is relevant to mortgage rates. That doesn’t necessarily mean we will see bond prices and mortgage rates stay at current levels today though. We should watch the major stock indexes for indication of a potential intra-day change in rates. If stocks move into negative ground, bonds could improve, leading to a downward revision in rates later today. On the other hand, if stocks rally and move into positive territory, pressure in bonds and an upward revision in mortgage pricing is a good possibility.

The Conference Board will post their Consumer Confidence Index (CCI) for December late tomorrow morning. This is a fairly important release because it measures consumer willingness to spend. If consumers are more confident about their personal financial and employment situations, they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely by market participants and can affect mortgage rate direction. Current forecasts are calling for a large increase in confidence from November’s reading of 88.7. Analysts are expecting tomorrow’s release to show a reading of 93.5, meaning consumers felt much better about their own financial situation than they did in November. The lower the reading, the better the news it is for bonds and mortgage pricing.

Overall, I am expecting to see Friday be the most active day for mortgage rates due to the release of December’s ISM index, although Wednesday morning could also be fairly busy as the year comes to an end. Because of the holiday affected trading, we can see a larger move in the bonds with little data than is the norm. Therefore, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- December 28, 2014

Week two of the year-end holiday season has only two monthly economic reports scheduled for release that are relevant to mortgage rates. One of those two is considered to be highly important to the bond and mortgage markets. There is nothing of importance tomorrow, but we still may see some movement in the markets and mortgage pricing as traders return from the extended holiday weekend.

The Conference Board will post their Consumer Confidence Index (CCI) for December late Tuesday morning. This is a fairly important release because it measures consumer willingness to spend. If consumers are more confident about their personal financial and employment situations, they are more apt to make a large purchase in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data is watched closely by market participants and can affect mortgage rate direction. Current forecasts are calling for a large increase in confidence from November’s reading of 88.7. Analysts are expecting Tuesday’s release to show a reading of 93.5, meaning consumers felt much better about their own financial situation than they did in November. The lower the reading, the better the news it is for bonds and mortgage pricing.

The bond market will close at 2:00 PM ET Wednesday ahead of the New Year’s Day holiday, but the stock markets are scheduled to be open for a full day of trading. All banks and major U.S. financial markets will be closed Thursday for the holiday and will reopen Friday morning for regular hours. As a result of the holiday schedule, we should see another round of lighter than normal trading a couple days. However, I don’t believe it will be as thin as we saw last week. That should help prevent larger moves in bonds on days with little or no news to justify the move like we saw last week.

After the holiday, the Institute for Supply Management (ISM) will post their manufacturing index for December late Friday morning. This highly important index measures manufacturer sentiment. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. That indicates manufacturing sector strength rather than contraction. Analysts are currently expecting to see a 57.7 reading in this month’s release, meaning that sentiment softened from November’s 58.7. A smaller reading will be good news for the bond market and mortgage shoppers, while a higher than expected reading could lead to higher mortgage rates Friday morning as it would point towards a stronger manufacturing sector.

Overall, I am expecting to see Friday be the most active day for mortgage rates, although Wednesday morning could also be fairly busy as the year comes to an end. It is difficult to label any day as the calmest because even tomorrow that doesn’t have anything scheduled to be posted could also be relatively busy following last week’s light holiday trading. Therefore, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- December 26, 2014

Friday’s bond market has opened up slightly in very light trading. The stock markets are showing minor gains with the Dow up 48 points and the Nasdaq up 23 points. The bond market is currently up only 2/32 (2.25%), which with Wednesday’s afternoon strength should be enough to improve this morning’s mortgage rates by approximately .125 of a discount point.

The bond market improved Wednesday after results of the 7-year Treasury auction were posted at 11:30 AM ET. However, this was not due to a particularly strong auction. In fact, the indicators we use to measure investor demand showed an average level of interest in the securities. That is likely why we saw bond prices improve yet little change in mortgage rates. There was so little volume in bonds Wednesday afternoon that the gains were not considered credible.

There is no relevant economic data being released today and with many traders still home for the holiday weekend, we should see a calm day in mortgage rates. The light trading from the holiday may allow bonds and stocks to show some movement, but I don’t believe mortgage lenders will be quick to react. Any movement in today’s markets will probably be considered in Monday’s pricing when staff and volume return to the marketplace.

Next week has a similar holiday schedule as this week had, but it brings us much less economic data. There are a couple of reports scheduled for release compared to this week’s full agenda, but next week does have a highly important piece of data set. It will come Friday, making what should have been a light day between the holiday and weekend now pretty interesting. Look for details on it and the rest of next week’s calendar in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- December 24, 2014

Wednesday’s bond market has opened in negative territory, extending yesterday’s afternoon weakness. The stock markets are showing minor gains, although it is worth noting that the Dow remains above 18,000 after breaking that threshold yesterday. The Dow is currently up 39 points while the Nasdaq has gained 11 points The bond market is currently down 4/32 (2.28%), which with yesterday’s afternoon selling should have this morning’s mortgage rates approximately .250 of a discount point over yesterday’s morning pricing.

The bond market started to weaken yesterday before the 5-year Treasury Note auction results were posted but the selling accelerated after the 1:00 PM ET posting showed weak investor demand in the sale. The result was upward revisions in mortgage rates from many lenders during afternoon trading yesterday. It also gives us little to look forward to in today’s 7-year Note auction. Results of today’s sale will be posted at 11:30 AM ET, so any reaction should come around lunchtime. Another showing of lackluster interest from investors could lead to another upward move in bond yields and mortgage rates.

Today had only one piece of economic data for the markets to digest and it did not give us favorable news. Last week’s unemployment numbers were posted at 8:30 AM ET this morning, showing that 280,000 new claims for unemployment benefits were filed last week, down from the previous week’s 289,000 initial claims. It was also the fourth consecutive decline in filings. The fewer filings indicates a strengthening employment sector and makes the data negative for mortgage rates. Fortunately, this is only a weekly report so its impact on this morning’s bond trading and mortgage pricing has been minimal.

Both the stock and bond markets will close early today ahead of tomorrow’s Christmas Day holiday. Stocks are expected to close at 1:00 PM ET while bonds will trade until 2:00 PM ET. It is a realistic expectation to see a pretty quiet and light volume session as many traders will head home for the holiday before the early closing times. That should keep mortgage rates relatively calm unless something significant and totally unexpected happens. The markets will reopen Friday morning for a full session, but with many traders still home for the holiday weekend, we should see another calm day. This is especially true because there is nothing of relevance scheduled for release Friday.

Lake Tahoe Mortgage Rate Trends- December 23, 2014

Tuesday’s bond market has opened in negative territory following a slew of economic news and early stock strength. The Dow is currently up 69 points and above 18,000 for the first time. The Nasdaq is showing a 6 point loss. The bond market is currently down 12/32 (2.19%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.

The first of today’s five reports came from the Commerce Department, who said that November’s Durable Goods Orders fell 0.7%, falling short of expectations of a 2.9% rise. A secondary reading that tracks new orders excluding transportation-related products such as airplanes also showed a weaker than expected reading (-0.4% vs +1.0%). Both readings indicate that demand for big-ticket products was not as strong as many had thought, making the data favorable for the bond market and mortgage rates.

However, this morning’s other early release gave us results that were anything but good news for bonds. The second revision to the 3rd Quarter Gross Domestic Product (GDP) showed that the U.S. economy grew at a surprising annual rate of 5.0%. This was much stronger than previously estimated and the largest quarterly rise since the third quarter of 2003, meaning that the economy was much stronger this summer than many had thought. The only thing preventing this news from causing a significant bond sell-off is the fact that this data is aged now and the markets are more interested in the current quarter’s reading that will be posted next month.

The third report of the morning was the revised University of Michigan Index of Consumer Sentiment for December just before 10:00 AM ET. It came in at 93.6, just shy of the preliminary estimate and forecasts of 93.8. This means that consumers were slightly less confident about their own financial and employment situations than previously estimated. However, it was not enough of variance to label the results good or bad for mortgage rates.

November’s Personal Income and Outlays data was released at 10:00 AM ET, later than its usual 8:30 AM time. It revealed a 0.4% increase in personal income and a 0.6% rise in spending. Income was a bit softer than expected but the rise in spending was a little stronger than forecasts. The income reading helps us measure consumer ability to spend while the spending reading tracks actual spending. Because the two readings more or less offset each other, we can consider this report neutral towards today’s mortgage pricing.

The fifth and final piece of relevant economic data of the morning was November’s New Home Sales data. The Commerce Department announced that sales of newly constructed homes fell 1.6% last month when analysts were expecting to see little change. That news supports yesterday’s Existing Home Sales report that indicated a softening housing sector. We can consider this news favorable for bonds and mortgage rates, but since it is the week’s least important piece of data it has had little influence on this morning’s rates.

Besides all this economic data, we also have a Treasury auction to watch this afternoon. 5-year Treasury Notes will be sold today and 7-year Notes go tomorrow. Today’s auction results will be posted at 1:00 PM ET while tomorrows’ will be announced at 11:30 AM ET. If the sales were met with a strong demand from investors, bond prices may rise enough to lead to a slight improvement in mortgage rates during early afternoon trading today and late morning tomorrow. However, a lackluster investor interest may create bond selling and upward revisions to mortgage rates.

Tomorrow has only a single report being released but it is not considered to be as important some of today’s data. At 8:30 AM tomorrow, we will get last week’s unemployment update. It is expected to show that 290,000 new claims for unemployment benefits were filed last week. That would be a slight increase from the previous week’s 289,000 initial claims. The higher the number of new claims, the better the news it is for the bond market and mortgage rates because rising claims indicates a softening employment sector. It is worth noting though that since this is only a weekly report, it usually takes a wide variance from forecasts for it to cause a noticeable move in mortgage pricing.

Tomorrow also has an early close for both the stock and bond markets ahead of Thursday’s Christmas Day holiday. Stocks are expected to close at 1:00 PM ET while bonds will trade until 2:00 PM ET. Even though the markets will be open for trading, I am expecting a pretty quiet and light volume session as many traders will head home long before the early closing times. That should keep mortgage rates relatively calm unless something significant and totally unexpected happens. The markets will reopen Friday morning for a full session, but with many traders still home for the holiday weekend, we should see another calm day.

Lake Tahoe Mortgage Rate Trends- December 22, 2014

Monday’s bond market has opened in negative territory despite weaker than expected housing data. The soft opening in bonds is likely due to early stock gains that have the Dow up 77 points and the Nasdaq up 10 points. The bond market is currently down 5/32 (2.17%), but due to strength late Friday, we should see an improvement of approximately .125 of a discount point in this morning’s mortgage rates if comparing to Friday’s early pricing.

November’s Existing Home Sales was today’s only relevant economic report, coming at 10:00 AM ET. The National Association of Realtors reported that home resales fell 6.1% last month to their weakest level since May of this year. That was a much larger decline than analysts were expecting to see, indicating the housing sector was softer than many had thought. Therefore, we should consider the data favorable for the bond and mortgage markets.

Tomorrow has the week’s remaining five pieces of economic data set for release in addition to a potentially relevant Treasury auction. It all starts with November’s Durable Goods Orders at 8:30 AM ET that gives us an important measurement of manufacturing sector strength by tracking orders for big-ticket items. These are products that are expected to last at least three years such as appliances, airplanes and electronics. Analysts are expecting the report to show a 2.9% rise in new orders. A decline in new orders would indicate that the manufacturing sector was weaker than many had thought. This would be good news for the bond market and should help push mortgage rates lower. However, a much larger jump in orders could lead to mortgage rates moving higher early tomorrow morning. This data is known to be quite volatile from month-to-month though, so it is not unusual to see large headline numbers in this report.

Also early tomorrow morning is the final revision to the 3rd Quarter Gross Domestic Product (GDP). I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 3.9% annual pace during the quarter and this month’s final revision is expected to show a 4.2% growth rate. A revision higher than that would be considered bad news for bonds. But since this data is quite aged at this point and 4th quarter numbers will be posted next month, I am not expecting this release to affect rates.

There are three reports being released during late morning trading tomorrow. The first of that group is the revised University of Michigan Index of Consumer Sentiment for December just before 10:00 AM ET. Current forecasts are calling for no change from the preliminary reading of 93.8. This is a fairly important index because rising consumer confidence indicates that consumers feel better about their own financial and employment situations, meaning they be more apt to make large purchases in the near future. A reading above forecasts would be negative for bonds and mortgage rates while a large decline would be favorable.

Next up is November’s Personal Income and Outlays data at 10:00 AM ET. It will give us an important measurement of consumer ability to spend and current spending habits. Since consumer spending makes up over two-thirds of the U.S. economy, any related data usually has a noticeable impact on the financial markets and mortgage rates. Current forecasts are calling for a 0.5% increase in income and a 0.5% increase in spending. If this report reveals weaker than expected readings, we could see the bond market improve and mortgage rates drop slightly late tomorrow morning, especially if the Durable Goods Orders report gives us favorable results also.

November’s New Home Sales data is the final economic report of the week. This report gives us another measurement of housing sector strength and mortgage credit demand. It is the sister report of today’s Existing Home Sales report, but covers a much smaller portion of the housing market than that one does. A weakening housing sector is considered good news for the bond market and mortgage rates because broader economic growth is less likely in the immediate future. Since bonds tend to thrive in weaker economic conditions, a large decline would be considered favorable for bond prices and mortgage rates. Current forecasts are calling for a slight increase in sales of newly constructed homes. Ideally, we would like to see a large drop in sales.

In addition to that batch of economic reports, we also have the 5-year Treasury auction taking place tomorrow. If the sale was met with a strong demand from investors, bond prices may rise enough to lead to a slight improvement in mortgage rates tomorrow afternoon. However, a lackluster investor interest may create bond selling and upward revisions to mortgage rates. Results will be announced at 1:00 PM ET tomorrow, so any reaction will come during early afternoon trading.

Lake Tahoe Mortgage Rate Trends- December 22, 2014

This week brings us the release of six pieces of monthly and quarterly economic data that are considered relevant to mortgage rates. It is a holiday-shortened week with the financial markets closing early Wednesday and remaining closed Thursday in observance of Christmas. None of the week’s data is considered key, but some of it does carry enough importance to affect mortgage pricing. All the reports come before the holiday, so the busiest part of the week will be the first couple days.

The first of this week’s releases will be November’s Existing Home Sales figures from the National Association of Realtors late tomorrow morning. It will give us a measurement of housing sector strength and mortgage credit demand and is expected to show a decline in sales, indicating a slowing housing sector. A sizable decline in sales would be considered positive for bonds and mortgage rates because a softening housing market makes broader economic growth more difficult. But unless the actual sales figures vary greatly from forecasts, the results will probably have a minor impact on tomorrow’s mortgage rates.

Tuesday has most of this week’s reports plus the first of two Treasury auctions. There are five pieces of economic data being posted Tuesday morning. It starts with November’s Durable Goods Orders at 8:30 AM ET. This data gives us an important measurement of manufacturing sector strength by tracking orders for big-ticket items or products that are expected to last at least three years such as appliances, airplanes and electronics. Analysts are expecting the report to show a 2.9% rise in new orders. A decline in new orders would indicate that the manufacturing sector was weaker than many had thought. This would be good news for the bond market and should help push mortgage rates lower. However, a much larger jump in orders could lead to mortgage rates moving higher early Tuesday morning. This data is known to be quite volatile from month-to-month though, so it is not unusual to see large headline numbers in this report.

Also at 8:30 AM ET Tuesday is the final revision to the 3rd Quarter Gross Domestic Product (GDP). I don’t think this data will have an impact on mortgage rates unless it varies greatly from its expected reading. Last month’s first revision showed that the economy expanded at a 3.9% annual pace during the quarter and this month’s final revision is expected to show a 4.2% growth rate. A revision higher than that would be considered bad news for bonds. But since this data is quite aged at this point and 4th quarter numbers will be posted next month, I am not expecting this release to affect rates Tuesday.

There are three reports being released late morning Tuesday. The first of that group is the revised University of Michigan Index of Consumer Sentiment for December just before 10:00 AM ET. Current forecasts are calling for no change from the preliminary reading of 93.8. This is a fairly important index because rising consumer confidence indicates that consumers feel better about their own financial and employment situations, meaning they be more apt to make large purchases in the near future. A reading above forecasts would be negative for bonds and mortgage rates while a large decline would be favorable.

Next up is November’s Personal Income and Outlays data at 10:00 AM ET. It will give us an important measurement of consumer ability to spend and current spending habits. Since consumer spending makes up over two-thirds of the U.S. economy, any related data usually has a noticeable impact on the financial markets and mortgage rates. Current forecasts are calling for a 0.5% increase in income and a 0.5% increase in spending. If this report reveals weaker than expected readings, we could see the bond market improve and mortgage rates drop slightly late Tuesday morning, especially if the Durable Goods Orders report gives us favorable results also.

November’s New Home Sales data is the final economic report of the week. This report gives us another measurement of housing sector strength and mortgage credit demand. It is the sister report of Monday’s Existing Home Sales report, but covers a much smaller portion of the housing market than that one does. A weakening housing sector is considered good news for the bond market and mortgage rates because broader economic growth is less likely in the immediate future. Since bonds tend to thrive in weaker economic conditions, a large decline would be considered favorable for bond prices and mortgage rates. Current forecasts are calling for a slight increase in sales of newly constructed homes. Ideally, we would like to see a large drop in sales.

In addition to this week’s economic data, we also have Treasury auctions scheduled the first three days. The two that are most likely to influence mortgage rates are Tuesday’s 5-year and Wednesday’s 7-year Note sales. If those sales are met with a strong demand, bond prices may rise enough to lead to improvements in mortgage rates shortly after the results are posted. They will be announced at 1:00 PM Tuesday and 11:30 AM Wednesday. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates Tuesday and/or Wednesday.

We also have early closings this week that sometimes influence trading. The stock and bond markets will both close early Wednesday ahead of the Christmas Day holiday and will reopen for regular trading hours Friday. Trading will likely be thin Wednesday, particularly during late morning and early afternoon hours as traders head home for the holiday and again Friday. It is fairly common for some traders to sell small portions of their holdings before a holiday or long weekend to protect themselves from unforeseen events that may take place while U.S. markets are closed. That is more common on 3-day weekends than just a day-and-a-half holiday, especially when the geo-political and international financial issues seem to be calm. However, the possibility does exist, so minor losses in trading Wednesday morning will not be of much concern.

Overall, labeling Tuesday as the key day of the week for mortgage rates is an easy call with five report releases and one auction all taking place. Friday should be the calmest day due to the expected light trading and nothing of importance scheduled for release. After Tuesday, I don’t think we have much to be concerned about regarding mortgage rate movement. However, it still would be prudent to watch the markets and maintain contact with your mortgage professional if still floating an interest rate.

Lake Tahoe Mortgage Rate Trends- December 19, 2014

Friday’s bond market has opened in positive territory as stocks take a breather from their massive two-day rally that pushed the Dow up almost 700 points. The major stock indexes are showing minor gains during early trading with the Dow up 38 points and the Nasdaq up 18 points. The bond market is currently up 4/32 (2.19%), but due to slight weakness in trading late yesterday, I don’t believe we will see an improvement in this morning’s mortgage rates.

There is nothing of importance scheduled for release today. If we see an intraday change in mortgage rates, it will likely be a result of a noticeable move in stocks. Stock strength generally leads to bond weakness and higher mortgage rates. If the major indexes fall further into negative ground, we may see mortgage rates improve slightly later today.

Next week has a large handful of economic reports scheduled for release that may influence mortgage rates. Most of them are set to be posted one particular day (Tuesday). There is data being released Monday also (November’s Existing Home Sales), but it is not known to be a market-moving piece of data.

It is worth noting that next week is a holiday-shortened week that could bring some additional volatility. The markets will officially be closed for Christmas and will close early the day before. But many traders will be home Friday also, leaving skeleton crews in the office. This means most trading will be done over two days and since it follows such an active week we had this week, I would not be surprised to see more volatility. Look for details on next week’s calendar and scheduled releases in Sunday evening’s weekly preview.