Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates: Morning Update-June 11,2013:

Tuesday’s bond market has opened in negative territory despite the lack of any relevant economic news and early stock weakness. The major stock indexes are showing sizable losses during early trading, mostly as a result of volatility in overseas markets. That has pushed the Dow lower by 124 points while the Nasdaq has lost 33 points. The bond market is currently down 11/32, upping the yield on the benchmark 10-year Treasury Note to 2.25%. This will likely push this morning’s mortgage rates higher by approximately .250 of a discount point even though we saw some afternoon strength late yesterday that caused some lenders to improve pricing.

There is nothing of relevance scheduled for release today or tomorrow in terms of economic data. This leaves outside influences to help direct bond prices and mortgage rates. Unfortunately, this should have been good news for mortgage rates today with stocks being in selling mode. However, it looks as all U.S. securities are of little interest today with stocks and bonds both in negative ground. Still, our best hope for an afternoon improvement to mortgage rates lies with the weakness in stocks. If the major stock indexes extend their early losses, bonds could find some support and move higher from current levels. That would be good news for mortgage shoppers because bond prices and yields move in opposite directions and mortgage rates tend to follow bond yields.

Even though there is no important economic data scheduled for release tomorrow, we do have something to watch that can cause movement in mortgage rates. The first of the week’s two relevant Treasury auctions will be held tomorrow when 10-year Treasury Notes will be sold. If the sale is met with a good level of investor demand, we may see the broader bond market strengthen and mortgage rates move slightly lower. This is an afternoon event though since the results of the sale will be posted at 1:00 PM ET tomorrow.

The week’s important economic news starts early Thursday morning with one release (May’s Retail Sales). That leaves three reports for Friday, one of which is considered highly important to the bond market (May’s Producer Price index). Until we get to that data, the best we can do is watch stocks for bond market and mortgage rate direction. Usually, stock weakness pushes funds into bonds and lowers mortgage rates. The key word in that sentence though is “usually.” There is no way to explain or justify today’s weakness with stocks so far into negative ground. Let’s hope rationale returns to the bond market later today or tomorrow morning and stocks extend their losses.