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Lake Tahoe Mortgage Trends- September 30, 2015

Wednesday’s bond market has opened in negative territory with stocks showing sizable gains. The Dow is currently up 226 points while the Nasdaq has gained 89 points. The bond market is currently down 4/32 (2.07%), but due to strength late yesterday we still should see a slight improvement in this morning’s rates if comparing to Tuesday’s morning pricing.

Today’s only relevant economic data failed to reveal any surprises. September’s ADP Employment report that was released at 8:15 AM ET this morning showed that 200,000 private sector payrolls were added, matching forecasts. Therefore, we can consider the data neutral for mortgage rates.

Tomorrow has two reports scheduled for release. One of them is much more important to the markets than the other. The less important one is the weekly unemployment update from the Labor Department. They are expected to say that 270,000 new claims for unemployment benefits were filed last week, up slightly from the previous week’s 267,000. Ideally, we want to see a large increase in initial claims because rising claims indicate a weakening employment sector. This report will be posted at 8:30 AM ET, but it usually takes a wide variance from expectations for it to have an impact on mortgage rates.

The Institute for Supply Management (ISM) will post their manufacturing index for September at 10:00 AM ET tomorrow. This index measures manufacturer sentiment and it can be heavily influential on the markets and mortgage rates. Analysts are expecting to see a decline from August’s 51.1 reading, meaning surveyed manufacturers felt business conditions were a little weaker in September than they were in August. This data is important not only because it measures manufacturer sentiment, but it is also very recent data. Some economic releases track data that are 30-60 days old. But the ISM index is only a few weeks old and usually the first report we see each month. If it reveals a reading below 50.6, meaning sentiment fell short of expectations, we should see the bond market move higher and mortgage rates fall tomorrow.

Lake Tahoe Mortgage Rate Trends- September 29, 2015

Tuesday’s bond market has opened in positive territory despite stronger than expected economic data. The stock markets are showing relatively minor gains with the Dow up 35 points and the Nasdaq up 19 points. The bond market is currently up 4/32 (2.08%), which should improve this morning’s mortgage rates by a little more than .125 of a discount point over Monday’s early pricing.

We saw bonds improve late yesterday as stocks losses got larger. The Dow closed the day down 312 points while the Nasdaq lost 142 points. When stocks are in selling mode, bonds usually become more appealing to investors to escape the volatility. This is known as flight-to-safety. The end result was a small improvement in mortgage rates by many lenders. If your lender revised pricing lower yesterday afternoon, you likely will see a smaller improvement this morning.

September’s Consumer Confidence Index (CCI) was released at 10:00 AM ET this morning. It showed a reading of 103.0 that greatly exceeded forecasts of 96.0. Analysts were expecting to see a decline from August’s revised 101.3 reading. This means that surveyed consumers felt much better about their own financial and employment situations than many had thought. Because rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, we should consider this data negative for bonds and mortgage rates.

Tomorrow’s only relevant release is the ADP Employment report for September at 8:15 AM ET. It has the potential to cause movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs of ADP’s clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have recently seen reaction to the report, we will be watching it. Analysts are expecting it to show that 200,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

Lake Tahoe Mortgage Rate Trends- September 28, 2015

Monday’s bond market has opened in positive territory following early weakness in stocks. The major stock indexes are starting the week with sizable losses of 165 points in the Dow and 73 points in the Nasdaq. The bond market is currently up 12/32 (2.12%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

August’s Personal Income and Outlays report was posted at 8:30 AM ET today. It revealed a 0.3% increase in income and a 0.4% rise in spending. Analysts were expecting to see income rose 0.4% and a 0.3% increase in spending. This means that consumer ability to spend was softer than predicted but actual spending was stronger. These are mixed readings of economic strength, so we can consider the data neutral toward mortgage rates.

Tomorrow’s only data is September’s Consumer Confidence Index (CCI) at 10:00 AM ET. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a good-sized decline in confidence from last month’s reading, indicating that consumers were less optimistic about their own financial situations than last month. This means they are less likely to make a large purchase in the near future. That is favorable news for the bond market and mortgage rates because consumer spending fuels economic growth. Analysts are calling for a reading of approximately 96.0, down from August’s 101.5 reading. The smaller the reading, the better the news for the bond market and mortgage rates.

Overall, I believe we will see a fair amount of volatility in the markets and mortgage rates this week, but the busiest days will probably be the latter part of the week. Labeling Thursday and Friday as the most important days is easy due to the significance of the economic reports scheduled those days. The calmest day for mortgage rates may be tomorrow but major moves in the stock markets could lead to movement in rates any day. With such important data and a relatively full calendar, it would be prudent to maintain fairly constant contact with your mortgage professional this week if still floating an interest rate.

Lake Tahoe Mortgage Rate Trends- September 27, 2015

This week brings us the release of six monthly economic reports that are likely to influence mortgage rates with two of them being extremely important to the financial and mortgage markets. Those upper tier releases can cause significant movement in mortgage rates if they show surprises. Accordingly, it appears we will have a couple of days with noticeable changes in rates this week but they will likely be the latter days.

The first report is August’s Personal Income and Outlays early tomorrow morning. It gives us an indication of consumer ability to spend and current spending habits. This is relevant to the markets because consumer spending makes up over two-thirds of the U.S. economy. Rising income generally indicates that consumers have more money to spend, making economic growth more of a possibility. That is negative news for mortgage rates because bonds tend to thrive in weaker economic conditions. It is expected to show an increase of 0.4% in income and a 0.3% increase in spending. If we see weaker than expected readings, the bond market should react positively, leading to lower rates tomorrow.

September’s Consumer Confidence Index (CCI) is next, late Tuesday morning. This Conference Board index will be posted at 10:00 AM ET and gives us a measurement of consumer willingness to spend. It is expected to show a good-sized decline in confidence from last month’s reading, indicating that consumers were less optimistic about their own financial situations than last month. This means they are less likely to make a large purchase in the near future. That is favorable news for the bond market and mortgage rates because consumer spending fuels economic growth. Analysts are calling for a reading of approximately 96.0, down from August’s 101.5 reading. The smaller the reading, the better the news for the bond market and mortgage rates.

Wednesday’s report that we need to watch is the ADP Employment report for September before the markets open. It has the potential to cause movement in the markets if it shows much stronger or weaker numbers than expected. This report tracks changes in private-sector jobs of ADP’s clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that follows a couple days later. Still, because we have recently seen reaction to the report, we will be watching it. Analysts are expecting it to show that 200,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

The Institute for Supply Management (ISM) will post their manufacturing index for September at 10:00 AM ET Thursday. This index measures manufacturer sentiment and it can be heavily influential on the markets and mortgage rates. Analysts are expecting to see a decline from August’s 51.1 reading, meaning surveyed manufacturers felt business conditions were a little weaker in September than they were in August. This data is important not only because it measures manufacturer sentiment, but it is also very recent data. Some economic releases track data that are 30-60 days old. But the ISM index is only a few weeks old and usually the first report we see each month. If it reveals a reading below 50.6, meaning sentiment fell short of expectations, we should see the bond market move higher and mortgage rates fall Thursday.

The biggest news of the week will come from the Labor Department, who will post September’s Employment report early Friday morning. This report will reveal the U.S. unemployment rate, number of new payrolls added or lost during the month and average hourly earnings. These are considered to be very important readings of the employment sector and can have a huge impact on the financial markets. The ideal scenario for the bond market is rising unemployment, falling payrolls and a drop in earnings. If this report gives us weaker than expected readings, bond prices should move higher and we should see lower mortgage rates Friday. However, stronger than forecasted readings could cause a sizable spike in mortgage pricing and start another upward trend in rates. Analysts are expecting to see the unemployment rate remain at 5.1%, an increase of 205,000 new jobs from August’s level and a 0.2% increase in earnings.

The Commerce Department will post August’s Factory Orders data at 10:00 AM ET Friday. This manufacturing sector report is similar to last week’s Durable Goods Orders release, but also includes orders for non-durable goods such as food and clothing. It can sometimes impact the bond market enough to change mortgage rates if it varies from forecasts by a wide margin. However, because it follows the monthly Employment report, I suspect the markets will not be focused on this report. Analysts are forecasting a decline of 1.0% in new orders, meaning manufacturing activity slowed in August. This would be good news for the bond market and mortgage pricing.

Overall, I believe we will see a fair amount of volatility in the markets and mortgage rates this week, but the busiest days will probably be the latter part of the week. Labeling Thursday and Friday as the most important days is easy due to the significance of the economic reports scheduled those days. The calmest day for mortgage rates will likely be Tuesday but major moves in the stock markets could lead to movement in rates any day. With such important data and a relatively full calendar, it would be prudent to maintain fairly constant contact with your mortgage professional this week if still floating an interest rate.

Lake Tahoe Mortgage Rate Trends- September 25, 2015

Friday’s bond market has opened in negative territory with stocks posting sizable gains and the day’s economic data showing unfavorable results. The major stock indexes appear ready to close the week out on an up day with the Dow up 154 points and the Nasdaq up 24 points. The bond market is currently down 10/32 (2.16%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point if comparing to Thursday’s morning pricing.

The second revision to the 2nd Quarter Gross Domestic Product (GDP) was posted at 8:30 AM ET this morning, showing that the economy grew at an annual rate of 3.9%. This was slightly higher than the 3.7% the initial revision showed and was expected again this morning. This means the economy was a little stronger than previously thought during the April through June months. However, this data is pretty old at this point so it has had little impact on this morning’s trading and mortgage rates.

The final report of the week was the University of Michigan’s revised Index of Consumer Sentiment for September just before 10:00 AM ET. It came in at 87.2, exceeding forecasts by .2. The variance isn’t much of a concern, but that reading was an increase from the preliminary estimate of 85.7. This means that surveyed consumers felt better about their own financial and employment situations than previously thought. Because rising confidence usually translates into stronger levels of consumer spending, we should consider this news slightly negative for mortgage rates.

Next week is busy in terms of economic reports scheduled for release that have the potential to affect mortgage rates. There is relevant data scheduled each day of the week, but the most important ones will come the latter days. A couple of the reports are considered to be highly important, including the monthly Employment report Friday morning. There is data set for Monday with the release of August’s Personal Income and Outlays that will give us a measurement of consumer ability to spend and current spending habits. Look for details on it and the rest of the week’s calendar in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- September 24, 2015

Thursday’s bond market has opened in positive territory following mixed economic news. Sizable losses in stocks are likely driving this morning’s bond gains. The Dow is currently down 235 points while the Nasdaq has lost 74 points. The bond market is currently up 17/32 (2.09%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

The first of this morning’s three releases was last week’s unemployment numbers at 8:30 AM ET. They showed that 267,000 new claims for unemployment benefits were filed last week, up a little from the previous week’s 264,000 initial claims. The increase is technically favorable news for bonds and mortgage rates, but analysts were expecting to see 271,000. Therefore, the employment sector appears to have been slightly stronger than thought last week, making the data bad news for mortgage pricing. Fortunately, this is only a weekly snapshot and has had little influence on this morning’s rates.

Also at 8:30 AM ET was the Commerce Department’s release of August’s Durable Goods Orders report. It revealed a 2.0% decline in new orders for big-ticket products such as electronics, appliances and airplanes. While the decline indicates softness in the manufacturing sector, it matched forecasts. Since the data is known to be volatile from month to month and still pegged expectations, I have to label this as neutral-to-slightly positive for mortgage rates.

The third and final economic release of the day was August’s New Home Sales report at 10:00 AM ET. The Commerce Department said that sales of newly constructed homes rose 5.7% last month, greatly exceeding the 1.6% increase that was forecasted. This means the new home portion of the housing sector was stronger than many had thought. Therefore, the data is negative news for mortgage rates. However, this is a report that is not considered to be of high importance to the markets, so it has also had a minimal impact on today’s trading and mortgage pricing.

We also have today’s 7-year Treasury Note auction to watch. Yesterday’s 5-year Note sale went pretty well with several benchmarks we use to measure investor interest showing a decent level of demand. That helps us to remain optimistic about today’s sale. If it also brings a good demand, we could see bond prices improve enough this afternoon to cause a slight downward improvement to mortgage rates. On the other hand, a weak level of interest may lead to pressure in bonds and possibly a slight increase to rates. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

Tomorrow has two more pieces of economic data being released, but neither is considered to be key or highly important. The first is the second revision to the 2nd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced within the U.S. and is considered the best measurement of economic activity. It is expected to show that the economy grew at an annual rate of 3.7%, matching last month’s estimate. The lower the number, the better the news it is for mortgage rates. Although it will likely take a significant revision to see a noticeable move in rates.

The second report of the day is the University of Michigan’s revised Index of Consumer Sentiment for September. The preliminary reading that was released earlier this month showed an 85.7 reading. Analysts are expecting to see an upward revision (87.0), meaning consumer confidence was stronger than previously thought. Waning confidence is good news for bonds because consumers that are concerned about their own financial and employment situations are less likely to make a large purchase in the near future, limiting economic growth. Therefore, a lower than expected reading would be favorable news for bonds and should help improve mortgage rates.

Lake Tahoe Mortgage Rate Trends- September 23, 2015

Wednesday’s bond market has opened in negative territory despite a lack of relevant economic data and a calm but mixed open in stocks. The Dow is down 12 points while the Nasdaq has gained 7 points. The bond market is currently down 10/32 (2.16%), but we should see little change in this morning’s mortgage rates if comparing to Tuesday’s early pricing. This is because strength in bonds late yesterday caused some lenders to improve rates slightly during afternoon trading. The net result is rates being very close to yesterday morning’s pricing.

Today’s only worthwhile event is the first of this week’s two Treasury auctions that have the potential to influence mortgage rates. The Treasury is selling 5-year Notes today and 7-year Notes tomorrow. They will tell us if there is an appetite in the markets for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction to the results will come during early afternoon trading.

There are three pieces of economic data set for release tomorrow morning. The first is the least important of the group when last week’s unemployment numbers will be posted at 8:30 AM ET. They are expected to show that 271,000 new claims for unemployment benefits were filed last week. The previous week had 264,000 initial claims, so analysts are expecting to see a rise in claims. Ideally, we would like to see a sizable increase in new claims, indicating employment sector softness. The higher the number of new claims, the better the news it is for mortgage rates. However, since this is only a weekly report, it usually takes a wide variance from forecasts for this data to affect mortgage pricing. And since it precedes two other reports, there is an even less chance of them being a factor in tomorrow’s mortgage rates.

August’s Durable Goods Orders will also be released at 8:30 AM ET, which is this week’s most important report. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Big-ticket products are items that are expected to last three or more years such as electronics and appliances. Analysts are expecting to see a decline in new orders, indicating weakness in the manufacturing sector. A larger decline than the 2.0% that is being forecasted should help boost bond prices and cause mortgage rates to drop Thursday because signs of economic weakness make longer-term securities more appealing to investors. However, an increase in new orders would indicate a stronger than expected manufacturing sector that would likely help push mortgage rates higher. It is worth noting that this data is known to be quite volatile from month-to-month, so a slight or moderate variance may not affect mortgage pricing.

The third release of the day will be August’s New Home Sales at 10:00 AM ET. The Commerce Department is expected to say that sales of newly constructed homes rose last month, indicating strength in the new home portion of the housing sector also. This report will likely not have a noticeable impact on mortgage rates unless its readings differ greatly from forecasts. This is the week’s least important monthly report in terms of potential impact on mortgage rates, partly because it covers only the small portion of all homes sales that Monday’s Existing Home Sales report did not.

Lake Tahoe Mortgage Rate Trends- September 22, 2015

Tuesday’s bond market has opened in positive territory due mostly to early stock weakness. The major stock indexes are showing sizable losses with the Dow down 190 points and the Nasdaq down 66 points. The bond market is currently up 13/32 (2.15%), but we likely will see little change in this morning’s mortgage rates if comparing to Monday’s morning pricing because of weakness in bonds late yesterday.

There is nothing of importance being released today, leaving bonds to be driven by stock trading. The morning selling in stocks has helped drive funds into bonds. This is common in times of volatility as investors seek safe-haven from the large swings in stocks. Today it is beneficial for mortgage shoppers, but if the major stock indexes rebound tomorrow, we should see today’s bond gains erased fairly quickly.

Tomorrow doesn’t have any relevant data scheduled either, but it does bring us the first of this week’s two Treasury auctions that have the potential to influence mortgage rates. The Treasury will sell 5-year Notes tomorrow and 7-year Notes Thursday. They will tell us if there is an appetite in the markets for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction to the results will come during afternoon trading tomorrow and Thursday.

We do have a small handful of relevant reports set for release Thursday and Friday, so the most active days of the week still are likely ahead of us.

Lake Tahoe Mortgage Rate Trends- September 21, 2015

Monday’s bond market has opened in negative territory even though today’s only relevant economic data showed us favorable results. The stock markets are starting the week with solid gains of 121 points in the Dow and 34 points in the Nasdaq. The bond market is currently down 13/32 (2.18%), but due to some gains late Friday we should see only a slight increase in this morning’s mortgage rates.

The National Association of Realtors gave us August’s Existing Home Sales report at 10:00 AM ET this morning. It showed that home resales fell 4.8% last month. That was much weaker than the 1.6% decline that was expected and indicates a softening housing sector. Since bonds tend to thrive in weaker economic conditions, we can consider this data favorable for mortgage rates. Unfortunately, bond traders aren’t too impressed with the news.

There are four remaining relevant monthly or quarterly reports set for this week, in addition to two potentially influential Treasury auctions. Most of the reports are considered to be of moderate to fairly high importance to the markets, so they do have the potential to affect mortgage rates although I am expecting to see less volatility in the financial and mortgage markets than we saw last week. We will be watching stocks and news from overseas to heavily impact bond trading and mortgage rates this week also.

There is nothing of importance scheduled for tomorrow. The next item on our calendar is the 5-year Treasury Note auction Wednesday afternoon. There are several reports set for release Thursday and Friday though, so don’t be surprised to see the most movement in rates the latter part of the week.

Overall, I don’t see an obvious choice for key day of the week but Thursday has the single most important report. So, let’s label it as likely to be most active although Friday does have two reports scheduled also. The least important day looks to be tomorrow with nothing of relevance scheduled. I suspect we will see changes in mortgage rates multiple days this week, but in small increments rather than sizable moves.

Lake Tahoe Mortgage Rate Trends- September 20, 2015

This week brings us the release of five relevant economic reports for the bond market to digest in addition to two potentially influential Treasury auctions. Most of the reports are considered to be of moderate to fairly high importance to the markets, so they do have the potential to affect mortgage rates although I am expecting to see less volatility in the financial and mortgage markets than we saw last week. We will be watching stocks and news from overseas to heavily impact bond trading and mortgage rates this week.

The first report of the week is August’s Existing Home Sales from the National Association of Realtors late tomorrow morning. This report will give us an indication of housing sector strength by tracking home resales in the U.S. It is expected to show a small decline from July’s sales, indicating the housing sector softened slightly last month. However, this data probably will be neutral towards mortgage pricing unless its results vary greatly from forecasts.

The Treasury will sell 5-year Notes Wednesday and 7-year Notes Thursday. They will tell us if there is an appetite in the markets for medium-term securities. If investor demand in these sales is strong, particularly from international buyers, the broader bond market should move higher, pushing mortgage rates lower. But a lackluster interest from investors could lead to bond selling and higher mortgage pricing. The results of the sales will be announced at 1:00 PM ET each day, so any reaction to the results will come during afternoon trading Wednesday and Thursday.

Thursday has two reports scheduled. The first is August’s Durable Goods Orders at 8:30 AM ET, which is the week’s most important report. This report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. Big-ticket products are items that are expected to last three or more years such as electronics and appliances. Analysts are expecting to see a decline in new orders, indicating weakness in the manufacturing sector. A larger decline than the 2.0% that is being forecasted should help boost bond prices and cause mortgage rates to drop Thursday because signs of economic weakness make longer-term securities more appealing to investors. However, an increase in new orders would indicate a stronger than expected manufacturing sector that would likely help push mortgage rates higher. It is worth noting that this data is known to be quite volatile from month-to-month, so a slight or moderate variance may not affect mortgage pricing.

August’s New Home Sales will be released late Thursday morning. The Commerce Department is expected to say that sales of newly constructed homes rose last month, indicating strength in the new home portion of the housing sector also. This report will likely not have a noticeable impact on mortgage rates unless its readings differ greatly from forecasts. This is the week’s least important report in terms of potential impact on mortgage rates, partly because it covers only the small portion of all homes sales that Monday’s Existing Home Sales report does not.

Friday morning has the second revision to the 2nd Quarter Gross Domestic Product (GDP). Since this data is aged now and the preliminary reading of the 3rd Quarter GDP will be released next month, I don’t see this revision having much of an impact on the financial markets or mortgage pricing. The GDP is important because it is the total sum of all goods and services produced within the U.S. and is considered the best measurement of economic activity. It is expected to show that the economy grew at an annual rate of 3.7%, matching last month’s estimate. The lower the number, the better the news it is for mortgage rates.

The second report of the day is the University of Michigan’s revised Index of Consumer Sentiment for September. The preliminary reading that was released earlier this month showed an 85.7 reading. Analysts are expecting to see an upward revision, meaning consumer confidence was stronger than previously thought. Waning confidence is good news for bonds because consumers that are concerned about their own financial and employment situations are less likely to make a large purchase in the near future, limiting economic growth. Therefore, a lower than expected reading would be favorable news for bonds and should help improve mortgage rates.

Overall, I don’t see an obvious choice for key day of the week but Thursday has the single most important data of the five. So, let’s label it as likely to be most active although Friday does have two reports scheduled also. The least important day looks to be Tuesday with nothing of relevance scheduled. I suspect we will see changes in mortgage rates multiple days this week, but in small increments rather than sizable moves.