Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- January 29, 2016

Friday’s bond market has opened in positive territory following mostly favorable economic data. The stock markets are showing pretty strong gains also with the Dow up 180 points and the Nasdaq up 42 points. The bond market is currently up 13/32 (1.93%), which should improve this morning’s mortgage rates by approximately .250 of a discount point.

There were three pieces of economic news posted this morning, one of which is considered to be key data. The key report was the initial Gross Domestic Product (GDP) reading for the 4th quarter. It revealed that the economy grew at an annual rate of 0.7% during the last three months of the year. This was a little softer than the 0.9% that was expected, making the report good news for bonds and mortgage rates. Bonds tend to thrive in weaker economic conditions, so the softer reading makes mortgage-related bonds more attractive to investors.

The 4th Quarter Employment Cost Index (ECI) was also released at 8:30 AM ET. It showed a 0.6% rise, matching forecasts. Since this was a minor report that did not show a surprise in the results, it has been a non-factor in this morning’s bond trading and mortgage pricing.

Closing out the day’s activities and this week’s schedule was January’s revised reading to the University of Michigan’s Index of Consumer Sentiment just before 10:00 AM ET. It came in at 92.0, falling short of the 93.2 that was expected. That means surveyed consumers were less optimistic about their own financial conditions than thought and are less likely to make a large purchase in the near future. Because consumer spending makes up over two-thirds of our economy, we can consider this data favorable for bonds and mortgage rates.

Next week does not have a significant number of economic reports scheduled for release, but a good portion of what is being posted is considered to be highly important. There are two reports set for Monday- Personal Income and Outlays along with the ISM manufacturing index. Both can affect mortgage rates noticeably. Look for details on those releases and the rest of the week’s activities in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- January 28, 2016

Thursday’s bond market has opened slightly in positive territory following weaker than expected economic news. Stocks have been active this morning but are currently showing gains of 10 points in the Dow and 3 points in the Nasdaq. The bond market is currently up 3/32 (1.99%), which with the post-FOMC gains yesterday should improve this morning’s mortgage rates by approximately .125 of a discount point if comparing to Wednesday’s morning pricing.

The Commerce Department announced at 8:30 AM ET this morning that new Durable Goods Orders fell 5.1% last month, falling well short of the 0.5% decline that was expected. A secondary reading that tracks new orders excluding more volatile and costly transportation-related products, such as new airplanes, slid 1.2% when analysts were calling for a 0.1% decrease. These are good readings for bonds and mortgage rates because they indicate weaker conditions in the manufacturing sector, at least for big-ticket items. This data is known to be quite volatile from month to month, but this was a wide enough margin to positively affect bond trading and mortgage pricing.

Also posted early this morning was last week’s unemployment figures. They showed that 278,000 new claims for unemployment benefits were made last week, down from the previous week’s revised total of 294,000. Since 285,000 is what was forecasted, we should consider the news negative for bonds as the softer number of initial claims hints that the employment sector was a bit stronger last week than many had thought.

We also have today’s 7-year Treasury Note auction to watch. Yesterday’s 5-year Treasury Note auction did not go very well, preventing us from getting too optimistic about today’s sale. If there is a strong demand in today’s auction, we could see bond prices improve during afternoon trading. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon hours.

Tomorrow has the remaining three reports, starting with what is arguably the single most important economic report that we see regularly. This would be the initial quarterly Gross Domestic Product (GDP) reading. Tomorrow’s release is the first of three versions we will get for the 4th quarter. This data is so important because it is considered to be the best measurement of economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. This initial reading will be followed by two revisions, each released approximately one month apart. Last quarter’s first reading, which usually carries the most significance, is expected to show the economy grew at an annual rate of only 0.9%. A noticeably weaker reading would be great news for the bond market, questioning the strength of our economy. That would likely fuel stock selling and a rally in bonds that should push mortgage rates lower. However, a larger than expected increase, indicating the economy was stronger than thought, will probably fuel bond selling and lead to higher mortgage rates.

The second release of the day will be the 4th Quarter Employment Cost Index (ECI), also at 8:30 AM ET. This index measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. If wages are rising, consumers have more money to spend and businesses usually need to charge more for their products and services. The report is considered moderately important and usually has more of an impact on the bond market than the stock markets. Current forecasts are showing an increase of 0.6%. A lower than expected reading would be favorable to bonds and mortgage rates tomorrow, but unless we see a large variance from forecasts and no surprises in the GDP, I am not expecting this report to have much of an influence on rates.

The final economic report of the week is the revised reading to the University of Michigan’s Index of Consumer Sentiment just before 10:00 AM ET. This index is another measurement of consumer confidence that is thought to indicate consumer willingness to spend. I don’t see this data having much of an influence on the markets or mortgage rates unless we see a large revision from the preliminary reading of 92.6. Currents forecasts are showing a 93.2 reading.

Lake Tahoe Mortgage Rate Trends- January 27, 2016

Wednesday’s bond market has opened in negative territory following stronger than expected economic news. The major stock indexes aren’t the cause of the bond weakness because they are showing noticeable losses themselves. The Dow is currently down 109 points while the Nasdaq has lost 50 points. The bond market is currently down 7/32 (2.02%), but we will likely see little change in this morning’s mortgage rates due to strength late yesterday.

December’s New Home Sales report was posted at 10:00 AM ET this morning, revealing a surprising 10.8% rise in sales of newly constructed homes. This was a larger increase than what was expected, indicating strength in the new home portion of the housing sector. That makes the data bad news for bonds and mortgage rates. However, I believe that this morning’s softness in bonds is more a result of anxiety over this afternoon’s events then it is this data.

There are two afternoon events taking place today. The first is the relatively important 5-year Treasury Note auction. The Fed will auction 5-year Notes today and 7-year Notes tomorrow. If these sales are met with a strong demand from investors, the broader bond market may improve during afternoon hours. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates during early afternoon trading.

Next up is this year’s first FOMC meeting that will adjourn at 2:00 PM ET. There was a decent chance of this meeting yielding another quarter point increase to key short-term interest rates before the recent sell-off in stocks and oil costs. But now I believe the significant selling in stocks recently may alter the Fed’s monetary policy plans, at least temporarily. A rate hike is still possible though, so we need to be prepared in case it does happen. Afternoon volatility in the markets today is a strong possibility following the post-meeting statement release. Look for an update to this report shortly after the markets have an opportunity to react to the statement.

Lake Tahoe Mortgage Rate Trends- January 26, 2016

Tuesday’s bond market has opened in negative territory following early stock strength and much stronger than expected economic news. Stocks are in rally mode with the Dow up 240 points and the Nasdaq up 23 points. The bond market is currently down 3/32 (2.01%), which should keep this morning’s mortgage rates close to yesterday’s levels.

January’s Consumer Confidence Index (CCI) was posted at 10:00 AM ET this morning, revealing a reading of 98.1 that was almost two points higher than December’s revised reading. It also exceeded forecasts of 96.8, indicating surveyed consumers were more optimistic about their own financial and employment situations than many had thought. That is considered bad news for bonds and mortgage rates because rising confidence usually translates into more consumer spending, making for a stronger economy.

Tomorrow has one economic report we will be watching but it will likely be one of the afternoon events that will be the center of attention. December’s New Home Sales will be released at 10:00 AM ET tomorrow morning. It is considered to be the sister release to last week’s Existing Home Sales, giving us a small snapshot of housing sector strength. It tracks a much smaller portion of home sales than last week’s report did and is forecasted to show an increase in sales of newly constructed homes. However, this data is not important enough to heavily influence mortgage pricing unless it varies greatly from forecasts.

This year’s first FOMC meeting that began today will adjourn at 2:00 PM ET tomorrow. There was a decent chance of this meeting yielding another quarter point increase to key short-term interest rates before the recent sell-off in stocks and oil costs. But now I believe the significant selling in stocks recently may alter the Fed’s monetary policy plans, at least temporarily. A rate hike is still possible though, so we need to be prepared in case it does happen. Afternoon volatility in the markets tomorrow is a strong possibility following the post-meeting statement release. This statement will not precede a press conference like last meeting did.

Also worth noting is tomorrow’s 5-year Treasury Note auction. If the sale is met with a strong demand from investors, the broader bond market may improve after results are posted at 1:00 PM ET. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates until we get to the FOMC statement. A strong interest in the securities could help boost bond prices.

Lake Tahoe Mortgage Rate Trends- January 25, 2016

Monday’s bond market has opened in positive territory with stocks starting the week in negative ground. The major stock indexes are showing moderate losses with the Dow down 66 points and the Nasdaq down 9 points. The bond market is currently up 7/32 (2.03%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

There is nothing of importance set for release today that is likely to affect mortgage rates. The rest of the week is pretty busy though, having six economic reports in addition to the first FOMC meeting of the year and a couple of Treasury auctions that have the potential to affect bond trading and slightly move rates.

The calendar starts tomorrow with January’s Consumer Confidence Index (CCI) at 10:00 AM ET. This report is considered to be of moderate importance to the bond market and therefore can move mortgage rates if it shows any surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a small rise from December’s reading, indicating consumer confidence was a little stronger than last month. A reading much smaller than the expected 96.8 would be ideal for the bond market and mortgage rates. A higher reading than forecasts would hint that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher tomorrow.

Overall, Wednesday is a pretty safe bet as most important for mortgage rates but Friday is also a key day. Wednesday has the FOMC meeting results that is always big news and Friday’s GDP report is highly important also. And stocks can affect bond trading and mortgage pricing any day, as we have seen with all the recent volatility. With all of this scheduled, there is a decent chance of seeing a very active week in mortgage rates this week. Therefore, please maintain constant contact with your mortgage professional if still floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- January 24, 2016

This week is quite busy with six economic reports along with other events that are relevant to bond trading and mortgage rates. In addition to those six reports, there is also a two-day FOMC meeting and a couple of Treasury auctions that have the potential to affect bond trading enough to slightly move rates. There is nothing of importance set for release tomorrow, but we still should see some movements in the markets due to this weekend’s weather-related news and expected volatility in stocks.

The week’s calendar kicks off Tuesday with January’s Consumer Confidence Index (CCI) at 10:00 AM ET. This report is considered to be of moderate importance to the bond market and therefore can move mortgage rates if it shows any surprises. It is an indicator of consumer sentiment, which is important because waning confidence in their own financial situations usually means that consumers are less willing to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, market participants are very attentive to related data. Analysts are expecting to see a small rise from December’s reading, indicating consumer confidence was a little stronger than last month. A reading much smaller than the expected 96.8 would be ideal for the bond market and mortgage rates. A higher reading than forecasts would hint that consumers are more likely to spend in the immediate future, fueling economic growth and possibly pushing mortgage pricing higher Tuesday.

December’s New Home Sales will be released late Wednesday morning. It is considered to be the sister release to last week’s Existing Home Sales, giving us a small snapshot of housing sector strength. It tracks a much smaller portion of home sales than last week’s report did and is forecasted to show an increase in sales of newly constructed homes. However, this data is not important enough to heavily influence mortgage pricing unless it varies greatly from forecasts.

This year’s first FOMC meeting that begins Tuesday will adjourn Wednesday at 2:00 PM ET. There was a decent chance of this meeting yielding another quarter point increase to key short-term interest rates before the recent sell-off in stocks and oil costs. However, I believe the significant selling in stocks may alter the Fed’s monetary policy plans, at least temporarily. A rate hike is still possible though, so we need to be prepared in case it does happen. Afternoon volatility in the markets Wednesday is a strong possibility following the post-meeting statement release.

Thursday’s only relevant monthly report is December’s Durable Goods Orders at 8:30 AM ET. It helps us measure manufacturing strength by tracking new orders at U.S. factories for products that are expected to last three or more years. These are also known as big-ticket items and include things such appliances, electronics and airplanes. The data is known to be quite volatile from month-to-month, but is currently expected to show a decline in orders of approximately 0.5%. A large drop in orders would be considered good news for bonds and mortgage rates. Even though this an important report, a slight variance likely will have little impact on Thursday’s mortgage pricing because of the large swings that are common in the data. Bond traders would prefer to see a large decline that would indicate weakness in the manufacturing sector.

Friday has the remaining three reports, starting with what is arguably the single most important economic report that we see regularly. This would be the initial quarterly Gross Domestic Product (GDP) reading. Friday’s release is the first of three we will get for the 4th quarter. This data is so important because it is considered to be the best measurement of economic activity. The GDP itself is the total sum of all goods and services produced in the United States. Its results usually have a major impact on the financial markets and can cause significant changes in mortgage rates. This initial reading will be followed by two revisions, each released approximately one month apart. Last quarter’s first reading, which usually carries the most significance, is expected to show the economy grew at an annual rate of only 0.9%. A noticeably weaker reading would be great news for the bond market, questioning the strength of our economy. That would likely fuel stock selling and a rally in bonds that should push mortgage rates lower Friday morning. However, a larger than expected increase, indicating the economy was stronger than thought, will probably fuel bond selling and lead to higher mortgage rates.

The second release of the day will be the 4th Quarter Employment Cost Index (ECI), also at 8:30 AM ET. This index measures employer costs for employee wages and benefits, giving us an indication of the threat of wage inflation. If wages are rising, consumers have more money to spend and businesses usually need to charge more for their products and services. The report is considered moderately important and usually has more of an impact on the bond market than the stock markets. Current forecasts are showing an increase of 0.6%. A lower than expected reading would be favorable to bonds and mortgage rates Friday, but unless we see a large variance from forecasts and no surprises in the GDP, I am not expecting this report to have much of an influence on rates.

The final economic report of the week is the revised reading to the University of Michigan’s Index of Consumer Sentiment just before 10:00 AM ET Friday. This index is another measurement of consumer confidence that is thought to indicate consumer willingness to spend. I don’t see this data having much of an influence on the markets or mortgage rates unless we see a large revision from the preliminary reading of 92.6.

Also worth noting, there are two relatively important Treasury auctions for the markets to digest. The Fed will auction 5-year and 7-year Treasury Notes Wednesday and Thursday respectively. If the sales are met with a strong demand from investors, the broader bond market may improve during afternoon hours. If they draw a lackluster interest, they could lead to bond selling and higher mortgage rates mid-afternoon Wednesday and/or Thursday.

Overall, Wednesday is a pretty safe bet as most important for mortgage rates but Friday is also a key day. Wednesday has the FOMC meeting adjournment that is always big news and Friday’s GDP report is highly important also. And stocks can affect bond trading and mortgage pricing any day, as we have seen with all the recent volatility. With all of this scheduled, there is a decent chance of seeing a very active week in mortgage rates this week. Therefore, please maintain constant contact with your mortgage professional if still floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- January 22, 2016

Friday’s bond market has opened in negative territory with stocks showing strong gains during early trading and the more important of today’s two economic releases giving us unfavorable results. The Dow is currently up 225 points while the Nasdaq is up 99 points. The bond market is currently down 15/32 (2.08%), which with some weakness late yesterday should push this morning’s mortgage rates higher by approximately .250 of a discount point.

The National Association of Realtors announced late this morning that home resales jumped 14.7% last month, exceeding forecasts by a pretty wide margin. Part of this increase is being attributed to a correction from November’s soft sales that were blamed on new disclosure rules that delayed closings. Still, because this news points towards a strengthening housing market that makes broader economic growth more likely, we need to consider the data negative for the bond and mortgage markets.

December’s Leading Economic Indicators (LEI) was also posted at 10:00 AM ET today, revealing a 0.2% decline. This was close to the 0.1% decline that was expected, meaning the indicators are predicting slower economic growth over the next several months. Since bonds tend to thrive in weaker economic conditions, we should consider this data good news for mortgage rates. However, it is a minor report that showed a slight variance from forecasts, so its impact on today’s trading has been nearly non-existent.

We have a pretty busy week to look forward to next week with mortgage relevant events taking place four of the five days. There is nothing of importance scheduled for Monday, but the rest of the week brings us some important economic data including the initial GDP reading for last quarter, along with the first FOMC meeting of the year and a couple of Treasury auctions. Look for details on next week’s calendar in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- January 21, 2016

Thursday’s bond market has opened down slightly even though today’s only relevant economic data gave us favorable results. The major stock indexes are showing sizable gains that are pressuring bonds during morning trading. The Dow is currently up 166 points while the Nasdaq has gained 40 points. The bond market is currently down 2/32 (1.99%), which should keep this morning’s mortgage rates close to yesterday’s levels.

Today’s only data was last week’s unemployment figures that showed 293,000 new claims for unemployment benefits were filed last week. This was much higher than the 280,000 that was expected and a noticeable increase from last week’s revised total of 283,000 initial claims. The increase indicates that the employment sector was weaker week than many had thought, making the data good news for bonds and mortgage rates.

Tomorrow has two economic reports that we will be watching, both at 10:00 AM ET. December’s Existing Home Sales from the National Association of Realtors is one. This data will give us a measurement of housing sector strength and mortgage demand by tracking home resales in the U.S. It is expected to show a rise in sales from November’s level, meaning the housing sector strengthened last month. Ideally, bond traders would like to see a decline in sales that would point toward housing sector weakness because a weakening housing sector makes broader economic growth more difficult. However, as long we don’t see a significant surprise in its results, it shouldn’t have a noticeable impact on tomorrow’s mortgage pricing.

December’s Leading Economic Indicators (LEI) is the final report of the week. The Conference Board, who is a New York-based business research group compiles the data and releases this report. It attempts to predict economic activity over the next several months, but since it is posted by a non-governmental agency, it is not considered to be of high importance to the financial and mortgage markets. Tomorrow’s release is expected to show a 0.1% decline, meaning the indicators are predicting a slight easing in economic activity this spring. As long as we don’t see a much stronger than predicted increase, I don’t think this data will have much of an influence on mortgage pricing either.

Lake Tahoe Mortgage Rate Trends- January 20, 2016

Wednesday’s bond market has opened up sharply following favorable economic news and another weak open in stocks. The stock selling that has pushed the Dow lower by 392 points and the Nasdaq down 130 points is a significant part of this morning’s bond gains. The bond market is currently up 27/32 (1.96%) which should push this morning’s mortgage rates lower by approximately .125 – .250 of a discount point if comparing to yesterday’s early pricing. A little weakness in bonds late yesterday is taking away from this morning’s gains.

The benchmark 10-year Treasury Note yield is below a very important threshold of 2.00%. It will be interesting to see if it remains below that level. Doing so opens the possibility of more improvements in the near future, driving mortgage rates lower also. On the other hand, if 2.00% is too strong of a resistance level and we close above it, this downward move in mortgage rates may be coming to an end very soon. The next day or two will be key in determining which direction we are heading.

There were two economic reports released this morning. The first being December’s Consumer Price Index (CPI) at 8:30 AM. It showed that the overall CPI reading fell 0.1% while the more important core data rose 0.1%. Both readings were 0.1% weaker than forecasts, indicating that inflationary pressures at the consumer level of the economy remained subdued. This is good news for long-term securities such as mortgage-related bonds because rising inflation erodes their value and makes them less appealing to investors.

Also posted early this morning was December’s Housing Starts that showed a 2.5% decline in new home groundbreakings. Analysts were expecting to see an increase in starts, so the data hints that the new home portion of the housing sector is softening. That makes the data favorable for bonds and mortgage rates. However, this data is not considered to be of high importance, limiting its impact on today’s rates.

Tomorrow’s only data is last week’s unemployment update at 8:30 AM ET. It is expected to show that 280,000 new claims for unemployment benefits were filed last week, down from the previous week’s 284,000 initial claims. This report usually doesn’t cause much movement in the markets or mortgage rates unless it shows a significant jump or drop in initial claims for benefits. The higher the number of claims, the better the news it is for bonds and mortgage rates.

Lake Tahoe Mortgage Rate Trends- January 19, 2016

Tuesday’s bond market has opened in negative territory with stocks posting solid gains following economic news from overseas that was favorable to stocks. The Dow is starting the week with a 138 point gain while the Nasdaq is up 37 points. The bond market is currently down 5/32 (2.05%) which should push this morning’s mortgage rates higher by approximately .125 of a discount point from Friday’s morning levels. The financial and mortgage markets were closed yesterday for the Martin Luther King Jr. holiday.

There is nothing of importance scheduled for release today, leaving bonds to be driven by stock movement. The rest of the week brings us the release of four pieces of monthly economic data for the markets to digest, with one of them considered to be highly important for mortgage rates. Because the markets were closed yesterday and today has nothing set that is worth watching, all of this week’s relevant releases come over only three days.

The first data of the week is December’s Consumer Price Index (CPI) at 8:30 AM tomorrow. This is one of the more important monthly reports for the bond market each month since it measures inflationary pressures at the consumer level of the economy. As with last week’s Producer Price Index (PPI), there are two readings in the release. The overall index is expected to remain unchanged from November’s reading while the core data rose 0.2%. Weaker than expected readings would be favorable news and should lead to bond strength and lower mortgage rates tomorrow morning.

December’s Housing Starts will also be posted early tomorrow morning. It helps us measure housing sector strength and future mortgage credit demand by tracking construction starts of new homes. It is not considered to be one of the more important releases each month, so I don’t see it causing much movement in mortgage rates but does carry the potential to affect trading and rates if it shows a significant surprise. Analysts are expecting to see an increase in new home starts between November and December.

Overall, despite a relatively light week in terms of the number of economic reports scheduled, we still may see a very active week in the markets and mortgage pricing. In addition to our data there are also some key pieces of foreign economic data being released that can be highly influential and the volatility in our stocks markets will also play into this week’s bond trading and mortgage rates. This means there is a strong possibility of seeing intraday revisions to mortgage rates more than one day. Therefore, please maintain contact with your mortgage professional and proceed cautiously if still floating an interest rate and closing in the near future.