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Lake Tahoe Mortgage Rate Trends- December 29, 2015

Tuesday’s bond market has opened in negative territory with stocks showing sizable gains and today’s sole economic report showing stronger than expected results. The major stock indexes are in rally mode, pushing the Dow higher by 179 points and the Nasdaq up 52 points. The bond market is currently down 13/32 (2.26%), but due to some strength late yesterday we should only see a slight increase in this morning’s mortgage pricing.

The Conference Board gave us this week’s only monthly data with the release of their Consumer Confidence Index (CCI) for December at 10:00 AM ET this morning. They announced a reading of 96.5 that exceeded forecasts by several points (93.5), indicating that surveyed consumers felt better about their own financial situations than many had thought. Because it is believed stronger confidence usually translates into higher consumer spending levels, this is bad news for bonds and mortgage rates.

We also have the first of this week’s two Treasury auctions that may influence rates taking place today. 5-year Notes will be sold today while 7-year Notes go tomorrow. If these 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. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates later today and/or tomorrow afternoon. Results will be announced at 1:00 PM, so any reaction will come during early afternoon trading.

There is no relevant economic data scheduled for tomorrow. I suspect it will be a fairly quiet day in the bond and mortgage markets except for possibly some year-end position selling or buying. Stocks could also affect which direction bonds and rates move tomorrow as can the Treasury auction.

Lake Tahoe Mortgage Rate Trends- December 28, 2015

Monday’s bond market has opened in positive territory with stocks starting the last week of the year in negative ground. The Dow is currently down 82 points while the Nasdaq has lost 36 points. The bond market is currently up 5/32 (2.22%). This should improve this morning’s mortgage rates slightly from last Thursday’s closing levels.

There is no relevant economic data or other events scheduled for today. The rest of the holiday-shortened week has only one monthly economic report scheduled for release that may affect mortgage rates in addition to a couple of potentially influential Treasury auctions tomorrow and Wednesday.

That sole monthly report will come late tomorrow morning when the Conference Board posts their Consumer Confidence Index (CCI) for December. 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 an increase in confidence from November’s reading of 90.4. 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 tomorrow be the most active day for mortgage rates, although I don’t see much to be worried about in this week’s calendar. Despite a lack of data this week, please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future. This is because something unexpected can have a heavier impact on the markets than usual when holidays create thing trading days such as these.

Lake Tahoe Mortgage Rate Trends- December 27, 2015

Week two of the year-end holiday season has only one monthly economic report scheduled for release that is relevant to mortgage rates in addition to a couple of potentially influential Treasury auctions. 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 an increase in confidence from November’s reading of 90.4. 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.

We also have Treasury auctions scheduled the first three days of the week. 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. But a lackluster investor demand may create bond selling and upward revisions to mortgage rates Tuesday and/or Wednesday. Results will be announced at 1:00 PM each day, so any reaction will come during early afternoon trading.

The bond market will close at 2:00 PM ET Thursday 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 Friday for the holiday and will reopen Monday morning for regular hours. As a result of the holiday schedule, we should see another round of lighter than normal trading a couple days. Therefore, don’t be surprised to see larger moves in bonds with little apparent reason. I would be more concerned with bond losses early in the week than any that may come later in the week.

Overall, I am expecting to see Tuesday be the most active day for mortgage rates, although I don’t see much to be worried about in this week’s calendar. 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. Accordingly, 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 24, 2015

Thursday’s bond market has opened up slightly in what will likely be a pretty quiet day. The stock markets are mixed with the Dow down 41 points and the Nasdaq up 1 point. The bond market is currently up 2/32 (2.25%), which should improve this morning’s mortgage rates slightly from yesterday’s morning pricing.

Last week’s unemployment figures were posted early this morning, showing that 267,000 new claims for benefits were filed last week. This was a decline from the previous week’s revised total of 272,000 initial claims. Analysts were expecting to see 271,000 claims, meaning the employment sector appears to have strengthened slightly last week. That makes the data negative for bonds and mortgage rates but since this is only a weekly update, it has had a minimal impact on today’s trading.

We have early closings today ahead of tomorrow’s Christmas Day holiday. Stocks will close at 1:00 PM ET today while bonds will close at 2:00 PM ET. All the markets will be closed tomorrow and will reopen Monday morning for regular trading hours. These holidays sometimes cause a little additional volatility as investors look to protect themselves over the long weekend and most firms are working on a skeleton staff. We should see very thin or light trading as many traders will be home already. Therefore, we shouldn’t be too concerned about any bond losses or excited about gains that may come today.

We would like to take this opportunity to wish you and yours a wonderful and safe holiday!

Lake Tahoe Mortgage Rate Trends- December 23, 2015

Wednesday’s bond market has opened in negative territory due to early gains in stocks and stronger than expected economic news. The major stock indexes are showing noticeable improvements with the Dow up 89 points and the Nasdaq up 25 points. The bond market is currently down 9/32 (2.26%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.

This morning had two economic reports released at 8:30 AM ET and two during late morning trading. The first and most important of the four was November’s Durable Goods Orders that showed no change from October’s level. This indicates flat manufacturing activity, at least in big-ticket products. Analysts were expecting to see a decline of 0.7%, so the flat reading means new orders were stronger than expected. However, that size of a variance is not nearly as relevant in this data as it is in most of the other reports we see. That is because this data is known to be quite volatile from month to month. Still, the results are technically bad news for the bond and mortgage markets since they show stronger than expected economic activity.

November’s Personal Income and Outlays data was the second release. It revealed 0.3% increases in both the income and spending readings. Those pegged forecasts, making them neutral to slightly negative for mortgage pricing. The increase in income means consumers had more money to spend than they did last month and the rise in spending shows that they did spend it. Because consumer spending makes up over two-thirds of the U.S. economy, any related data is relevant to the markets.

The third release 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 92.6, which was an upward revision from the preliminary reading of 91.8 and a little higher than the 92.0 that was expected. The higher reading means surveyed consumers were more optimistic about their own financial situations than previously thought and are more likely to make a large purchase in the near future. Accordingly, we should also consider this bad news for the bond market and mortgage rates.

November’s New Home Sales data was the final monthly economic report of the day and this week. This report gives us another measurement of housing sector strength and mortgage credit demand. It showed a 4.2% increase in sales of newly constructed homes, exceeding expectations of a 2.0% rise. Even though that would appear to be bad news for mortgage rates, the number of sales is offsetting that larger increase. A sizable downward revision to the number of October sales puts November’s sales to a lower level than October’s were previously thought to be. This allows us to label this report as neutral rather than negative for the mortgage market.

Tomorrow’s only data is last week’s unemployment update. It will give us a small snapshot of the employment sector and is expected to show that 271,000 new claims for unemployment benefits were filed last week. The higher the number of claims, the better the news it is because rising claims hints at a softening labor market. However, since this is only a weekly report, it likely will not have much of an impact on mortgage rates unless it shows a significant variance from forecasts.

The markets will be closing early tomorrow and remain closed Friday in observance of the Christmas Day holiday. Stocks will close at 1:00 PM while bonds will close at 2:00 PM ET. These holidays sometimes cause a little additional volatility as investors look to protect themselves over the long weekend. We should see very thin or light trading as many traders will be home for the holiday already. Therefore, we shouldn’t be too concerned about any bond losses or excited about gains that come during tomorrow’s shortened session.

Lake Tahoe Mortgage Rate Trends- December 22, 2015

Tuesday’s bond market has opened in negative territory even though we received some favorable economic news this morning. The stock markets are showing relatively minor gains with the Dow up 38 points and the Nasdaq up 12 points. The bond market is currently down 8/32 (2.22%), which should push this morning’s mortgage rates higher by approximately .250 of a discount point.

The second revision to the 3rd Quarter Gross Domestic Product (GDP) reading was the first of today’s two relevant economic releases. It showed a 2.0% annual rate of growth as it was expected to do. This means that the economy grew at a slightly slower pace than previously thought (2.1%) during the third quarter. While that technically is good news for bonds, it is aged data now and was not a surprise to the markets. Therefore, it has had no impact on today’s mortgage rates.

November’s Existing Home Sales figures were posted at 10:00 AM ET today. The National Association of Realtors announced a 10.5% decline in home resales during November. This was much weaker than analysts were expecting to see, indicating a weakening housing sector. That is good news for bonds and mortgage rates, but unfortunately for mortgage borrowers the data apparently is being ignored this morning. This should have been enough of a variance from forecasts to have a positive impact on rates.

There are four economic reports due to be released tomorrow morning that may influence mortgage rates. They start 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 0.7% decline in new orders. A larger drop 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 large jump in orders could lead to mortgage rates moving higher early Wednesday 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.

Next up is November’s Personal Income and Outlays data, also at 8:30 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 0.3% increase in income and a 0.3% increase in spending. If this report reveals weaker than expected readings, we could see the bond market improve and mortgage rates drop slightly Wednesday morning, especially if the Durable Goods Orders report gives us favorable results also.

The third release of the day is the revised University of Michigan Index of Consumer Sentiment for December just before 10:00 AM ET. Current forecasts are calling for a slight increase (92.0 from 91.8), meaning surveyed consumers felt a little better about their own financial and employment situations than they did in October. Bond traders would prefer to see a decline because waning confidence usually means consumers are less likely to make a large purchase in the near future.

November’s New Home Sales data is the final monthly 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 an increase in sales of newly constructed homes. Ideally, we would like to see a large drop in sales.

Lake Tahoe Mortgage Rate Trends- December 21, 2015

Monday’s bond market has opened in positive territory despite stocks showing strong gains during early trading. The Dow is currently up 109 points while the Nasdaq has gained 31 points. The bond market is currently up 4/32 (2.19%), which should improve this morning’s mortgage rates by approximately .125 of a discount point if comparing to Friday’s morning pricing.

There is nothing of importance scheduled for release today. The rest of the 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 Thursday and remaining closed Friday in observance of the Christmas holiday. None of the week’s data is considered key, but some of it does carry enough importance to affect mortgage pricing.

Tomorrow has two of those reports scheduled with the first being the final revision to the 3rd Quarter Gross Domestic Product (GDP) reading at 8:30 AM ET. 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 2.1% annual pace during the quarter and this month’s final revision is expected to show a 2.0% 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 tomorrow.

November’s Existing Home Sales figures will be released late tomorrow morning. The National Association of Realtors is expected to announce a decline in home resales last month, indicating a slowing housing sector. This report will give us a measurement of housing sector strength and mortgage credit demand. 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 mortgage rates.

Overall, labeling Wednesday as the key day of the week for mortgage rates is an easy call with four report releases, but tomorrow may also be pretty active for the markets and mortgage rates. It is worth noting that the markets will close early Thursday and will remain closed Friday for the Christmas Day holiday. Despite the shortened week, 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 20, 2015

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 Thursday and remaining closed Friday 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. None of the week’s reports come tomorrow.

The first of this week’s releases is the final revision to the 3rd Quarter Gross Domestic Product (GDP) early Tuesday morning. 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 2.1% annual pace during the quarter and this month’s final revision is expected to show a 2.0% 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.

November’s Existing Home Sales figures will be released late Tuesday morning. The National Association of Realtors is expected to announce a decline in home resales last month, indicating a slowing housing sector. This report will give us a measurement of housing sector strength and mortgage credit demand. 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 mortgage rates.

There are four pieces of economic data being posted Wednesday 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 0.7% decline in new orders. A larger drop 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 large jump in orders could lead to mortgage rates moving higher early Wednesday 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.

Next up is November’s Personal Income and Outlays data, also at 8:30 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 0.3% increase in income and a 0.3% increase in spending. If this report reveals weaker than expected readings, we could see the bond market improve and mortgage rates drop slightly Wednesday morning, especially if the Durable Goods Orders report gives us favorable results also.

The third release of the day is the revised University of Michigan Index of Consumer Sentiment for December just before 10:00 AM ET. Current forecasts are calling for a slight increase (92.0 from 91.8), meaning surveyed consumers felt a little better about their own financial and employment situations than they did in October. Bond traders would prefer to see a decline because waning confidence usually means consumers are less likely to make a large purchase in the near future.

November’s New Home Sales data is the final monthly 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 Tuesday’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 an increase in sales of newly constructed homes. Ideally, we would like to see a large drop in sales.

We also have early closings this week that sometimes influence trading. The stock and bond markets will both close early Thursday ahead of Friday’s Christmas Day holiday and will reopen for regular trading hours Monday. Trading will likely be thin Wednesday afternoon as traders head home for the holiday. 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 geopolitical and international financial issues seem to be calm. However, the possibility does exist, so minor losses in trading Thursday morning will not be of much concern.

Overall, labeling Wednesday as the key day of the week for mortgage rates is an easy call with four report releases, but Tuesday may also be pretty active for the markets and mortgage rates. Despite the shortened week, 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 18, 2015

Friday’s bond market has opened in positive territory with stocks appearing to close out the week on a negative note. The Dow is currently down 143 points while the Nasdaq has lost 19 points. The bond market is currently up 4/32 (2.21%), which should keep this morning’s mortgage rates close to yesterday’s levels. There is enough of a difference for some lenders to possibly show a slight improvement, but most will likely show little change.

There is no relevant economic data being posted today. The best chance at something affecting rates later today would be further stock losses (or a rebound) or a lunchtime speaking engagement by Fed member Jeffrey Lacker that could cause some movement in the markets if he says anything surprising. If no surprise comes from him and the major stock indexes remain near current levels, mortgage rates should follow suit.

Next week has a handful of reports set for release but they are all scheduled to be posted over two days. None of them are considered key releases, although several carry enough importance to move mortgage rates if there is a moderate variance from forecasts. Monday has nothing scheduled, so we can expect weekend news or stock movement to be the biggest factor in rates that day.

We also kick off the holiday trading schedule next week with early closings and full-day closings each of the next two weeks. Look for details on next week’s events in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- December 17, 2015

Thursday’s bond market has opened in positive territory even though this morning’s economic data did not give us favorable results. The stock markets are showing early losses with the Dow down 54 points and the Nasdaq down 1 point. The bond market is currently up 12/32 (2.25%), which with yesterday’s post-FOMC move should improve this morning’s mortgage rates by approximately .250 of a discount point if comparing to Wednesday’s morning pricing.

Both of this morning’s economic releases gave us news that was negative for bonds and mortgage rates, but fortunately neither is considered to be important or highly influential on the markets. The first was last week’s unemployment update at 8:30 AM ET. It showed that 271,000 new claims for unemployment benefits were filed last week, down from the previous week’s 282,000 initial filings. Analysts were expecting to see 276,000 claims. Because the number was lower than expected and declining initial claims hints at a strengthening employment sector, we need to consider this bad news for mortgage rates.

The second report of the morning and the final economic release of the week was November’s Leading Economic Indicators (LEI) at 10:00 AM ET. The Conference Board announced an increase of 0.4% that means the indicators are predicting a stronger rate of economic growth over the next several months than many had thought. Since bonds tend to thrive in weaker economic conditions, this report is also negative for bonds and mortgage rates.

Tomorrow has no relevant data or other events scheduled that are expected to affect mortgage rates. There is a lunch time speaking engagement by Fed member Jeffrey Lacker that could cause some movement in the markets if he says anything surprising. Especially following yesterday’s FOMC events. With exception to that, we could see a fairly calm day in mortgage rates tomorrow.