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Lake Tahoe Mortgage Rate Trends- May 26, 2016

Thursday’s bond market has opened in positive territory even though we got stronger than expected economic headlines. The stock markets are showing minor losses with the Dow down 42 points and the Nasdaq down 1 point. The bond market is currently up 8/32 (1.84%), but weakness late yesterday should keep this morning’s mortgage rates close to Wednesday’s early levels.

We saw some bond weakness late yesterday despite a pretty decent 5-year Treasury Note auction. Several benchmarks we use to gauge investor demand showed a fairly strong interest in the securities. While that didn’t seem to help much yesterday, it does allow us to be optimistic about today’s 7-year Note sale. Another strong level of investor demand should help boost bond prices this afternoon. Results will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

The Commerce Department gave us the first of this morning’s two releases by posting April’s Durable Goods Orders at 8:30 AM ET. They announced an increase of 3.4% that exceeded expectations of a 0.6% rise in new orders for big-ticket products. However, a secondary reading that tracks orders excluding more volatile and costly transportation-related items, such as new airplanes, rose only 0.4% when analysts were predicting a 0.5% increase. The mixed results seemed to prevent much of a reaction to the report.

Also posted early this morning was last week’s unemployment figures. They showed that 268,000 new claims for unemployment benefits were filed last week, down from the previous week’s 278,000 initial claims. This is a sign that the employment sector strengthened last week, especially since forecasts were calling for 275,000 claims. Fortunately, this is only a weekly snapshot and has not had much of an influence on today’s mortgage pricing.

Tomorrow has two reports scheduled for release. One is the first revision to the 1st quarter Gross Domestic Product (GDP) at 8:30 AM ET. The GDP is the sum of all goods and services produced in the U.S. and is considered to be the best measurement of economic growth. Last month’s preliminary reading revealed a 0.5% annual rate of growth. Analysts expect an upward revision of 0.4% in this update, equating to economic growth of 0.9%. If the revision comes in much stronger than expected, we may see the bond market react negatively and mortgage rates move higher because it would mean the economy was stronger than thought last quarter. Since bonds tend to thrive in weaker economic conditions, a softer than predicted reading would be good news for mortgage rates.

The last mortgage-related data of the week will come from the University of Michigan just before 10:00 AM ET tomorrow morning when they update their Index of Consumer Sentiment for May. This type of data is watched fairly closely because when consumers are feeling more confident about their own financial situations, they are more likely to make a large purchase in the near future. Rising confidence and the higher levels of spending that usually follow are considered negative news for bonds and mortgage rates. Tomorrow’s report is expected to show a small downward revision to this month’s preliminary reading of 95.8. A higher reading would be considered bad news for bonds and mortgage pricing while a larger decline should help boost bond prices and lead to a slight improvement in rates.

Lake Tahoe Mortgage Rate Trends- May 25, 2016

Wednesday’s bond market has opened flat with nothing of importance set for release this morning and stocks showing strength. The Dow is currently up 137 points while the Nasdaq is up 27 points. The bond market is currently unchanged from yesterday’s close (1.86%), which should keep this morning’s mortgage rates close to yesterday’s morning levels.

Even though we don’t have any relevant economic data being posted this morning, we do have an afternoon event that has the potential to affect bond prices enough to influence mortgage pricing slightly. That would be the first of this week’s two Treasury auctions that is being held today. The Fed will auction 5-year Notes today and 7-year Notes tomorrow. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates.

On the other hand, strong investor demand in these usually make bonds more attractive to investors, bringing more funds into the bond market. The buying of bonds that follows often translates into slightly lower mortgage rates. Results of the sales are posted at 1:00 PM ET each auction day, so look for any reaction to come during early afternoon hours today and/or tomorrow.

Tomorrow has two pieces of economic data set for release, both at 8:30 AM ET. The more important of the two is April’s Durable Goods Orders. This Commerce Department report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. These are items made with an expected life span of three or more years such as airplanes, appliances and electronics. It is currently expected to show an increase in new orders of approximately 0.6%, hinting that the manufacturing sector strengthened a little last month. That would be relatively bad news for the bond market and mortgage rates, but this data is known to be quite volatile. Therefore, a small variance from forecasts will likely have little impact on mortgage rates. The larger the decline, the better the news it is for mortgage rates.

The second release of the morning will be last week’s unemployment figures. They are expected to show that 275,000 new claims for unemployment benefits were filed last week, down from the previous week’s 278,000 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 since rising claims is a sign of employment sector weakness.

Lake Tahoe Mortgage Rate Trends- May 24, 2016

Tuesday’s bond market has opened in negative territory following much stronger than expected housing data. The stock markets are rallying with the Dow up 197 points and the Nasdaq up 65 points. The bond market is currently down 11/32 (1.87%), but due to some strength late yesterday I don’t believe we will see much of a change in this morning’s mortgage rates.

April’s New Home Sales report was posted at 10:00 AM ET this morning. The Commerce Department announced a 16.6% spike in sales of newly constructed homes. This was the largest monthly increase in over 24 years and was the best level of sales since January 2008. The increase indicates strength in the new home portion of the housing sector, making the data bad news for mortgage pricing. Although this report doesn’t usually carry much significance, this surprisingly strong release has negatively impacted this morning’s bond and mortgage markets.

There is no relevant data scheduled for release tomorrow morning, but we do have the first of this week’s two Treasury auctions that have the potential to influence rates. The Fed will auction 5-year Notes tomorrow and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates.

On the other hand, strong investor demand in these usually make bonds more attractive to investors, bringing more funds into the bond market. The buying of bonds that follows often translates into slightly lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during afternoon hours tomorrow and Thursday.

We do have some fairly important data coming later in the week, including Durable Goods Orders and the revised 1st quarter GDP reading. None of the remaining data is considered key, but it does carry enough importance to cause movement in mortgage rates.

Lake Tahoe Mortgage Rate Trends- May 23, 2016

Monday’s bond market has opened in positive territory with stocks mixed and nothing of importance on today’s calendar. The Dow is currently down 9 points while the Nasdaq has gained 11 points. The bond market is currently up 5/32 (1.82%), which may improve this morning’s mortgage rates slightly from Friday’s early pricing.

There is nothing set for release today that is likely to affect mortgage rates with exception to a couple of speaking engagements by current Fed members. The rest of the week brings four pieces of economic data that may impact mortgage rates in addition to two Treasury auctions. None of the events are considered key or expected to be a market mover, but most of the reports do carry enough importance to affect mortgage pricing if they show a decent sized variance from forecasts.

The first release of the week will be April’s New Home Sales report at 10:00 AM ET tomorrow. It is the sister report of last week’s Existing Home Sales. This data gives us a similar measurement of housing sector strength and future mortgage credit demand, but tracks a much smaller portion of housing sales than that report did. Actually, it probably will not have much of an impact on mortgage pricing unless it shows a sizable variance from forecasts. Analysts are expecting to see gains in sales from March’s level, meaning the new home portion of the housing sector strengthened last month.

Overall, I think Thursday is the best candidate for most active day for mortgage rates this week although Friday’s GDP reading will draw plenty of attention also if it shows a sizable revision. With two relatively important reports scheduled for Friday, it may also be an active day. The least active day will probably be Wednesday unless the stock markets rally or show sizable losses. Please keep in mind that we don’t necessarily have to have important data for the markets and mortgage pricing to move considerably. 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- May 22, 2016

This week brings us the release of four pieces of economic data that may impact mortgage rates in addition to two Treasury auctions. None of the events are considered key or expected to be a market mover, but most of the reports carry enough importance to affect mortgage pricing if they show a decent sized variance from forecasts. There is nothing set for release tomorrow, leaving the stock markets to be most likely force behind a noticeable move in rates tomorrow.

The first release of the week will be April’s New Home Sales report at 10:00 AM ET Tuesday. It is the sister report of last week’s Existing Home Sales. This data gives us a similar measurement of housing sector strength and future mortgage credit demand, but tracks a much smaller portion of housing sales than that report did. Actually, it probably will not have much of an impact on mortgage pricing unless it shows a sizable variance from forecasts. Analysts are expecting to see gains in sales from March’s level, meaning the new home portion of the housing sector strengthened last month.

Wednesday has nothing scheduled that is expected to affect mortgage rates except the first of this week’s two Treasury auctions that are worth watching. The Fed will auction 5-year Notes Wednesday and 7-year Notes on Thursday. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. On the other hand, strong sales usually make bonds more attractive to investors, bringing more funds into bonds. The buying of bonds that follows usually translates into lower mortgage rates. Results of the sales will be posted at 1:00 PM ET each auction day, so look for any reaction to come during afternoon hours Wednesday and Thursday.

April’s Durable Goods Orders is Thursday’s only monthly report. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. These are items made with an expected life span of three or more years such as airplanes, appliances and electronics. It is currently expected to show an increase in new orders of approximately 0.6%, hinting that the manufacturing sector strengthened a little last month. That would be relatively bad news for the bond market and mortgage rates, but this data is known to be quite volatile. Therefore, a small variance from forecasts will likely have little impact on Thursday’s mortgage rates. The larger the decline, the better the news it is for mortgage rates.

Friday has two reports scheduled that are relevant to mortgage rates. The first revision to the 1st quarter Gross Domestic Product (GDP) will come at 8:30 AM ET. The GDP is the sum of all goods and services produced in the U.S. and is considered to be the best measurement of economic growth. Last month’s preliminary reading revealed a 0.5% annual rate of growth. Analysts expect an upward revision of 0.4% in this update, equating to economic growth of 0.9%. If the revision comes in much stronger than expected, we may see the bond market react negatively and mortgage rates move higher because it would mean the economy was stronger than thought last quarter. Since bonds tend to thrive in weaker economic conditions, a softer than predicted reading would be good news for mortgage rates.

The last mortgage-related data of the week will come from the University of Michigan late Friday morning when they update their Index of Consumer Sentiment for May. This type of data is watched fairly closely because when consumers are feeling more confident about their own financial situations, they are more likely to make a large purchase in the near future. Rising confidence and the higher levels of spending that usually follow are considered negative news for bonds and mortgage rates. Friday’s report is expected to show a small downward revision to this month’s preliminary reading of 95.8. A higher reading would be considered bad news for bonds and mortgage pricing while a larger decline should help boost bond prices and lead to a slight improvement in rates.

Overall, I think Thursday is the best candidate for most active day for mortgage rates this week although Friday’s GDP reading will draw plenty of attention also if it shows a sizable revision. With two relatively important reports scheduled for Friday, it may also be an active day. The least active day will probably be Wednesday unless the stock markets rally or show sizable losses. Please keep in mind that we don’t necessarily have to have important data for the markets and mortgage pricing to move considerably. 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- May 20, 2016

Friday’s bond market has opened in negative territory with stocks looking to close the week on a strong note. The Dow is currently up 130 points while the Nasdaq has gained 56 points. The bond market is currently down 4/32 (1.85%), but strength late yesterday should prevent much of a move in this morning’s mortgage rates.

Today’s only relevant economic data came from the National Association of Realtors, who announced late this morning that home resales rose 1.7% last month. This was a little stronger than expected and indicates modest growth in housing sector, but was not enough of an increase to cause much of a reaction in bonds or mortgage rates. I believe this morning’s bond softness is more a result of stock gains than this sole report.

Next week has a few scheduled reports that may affect mortgage rates, but none of them are considered key data. One is of fairly high importance, although I don’t see it being a market mover. There are also two Treasury auctions that have the potential to influence bonds enough to cause a minor revision in rates along with a decent number of Fed member speaking engagements that are always wildcards.

With exception to a couple of Fed speeches, Monday has nothing of importance that we need to be concerned with. The data doesn’t start until Tuesday morning and what is being posted that day usually has a minimal impact on mortgage pricing. Look for details on next week’s calendar in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- May 19, 2016

Thursday’s bond market has opened in positive territory, recovering yesterday’s post-FOMC minutes losses in mortgage bonds. The stock markets are in selling mode this morning with the Dow down 137 points and the Nasdaq down 38 points. The bond market is currently up 7/32 (1.83%), but due to weakness yesterday afternoon, we should see little change in rates if comparing to Wednesday’s morning pricing.

Yesterday’s afternoon release of the FOMC minutes ended up being problematic for the bond and mortgage markets. They seemed to indicate the Fed is more likely to raise key short-term rates at next month’s FOMC meeting than many analysts had previously thought. The minutes also gave the impression that the Fed is comfortable that inflation is rising and will hit their goal of a 2.0% annual pace sooner than the markets were expecting. Accordingly, bonds turned south after the minutes were released at 2:00 PM, causing many lenders to revise rates higher before the end of the day. That said, this morning’s gains should erase or offset that intraday revision late yesterday.

Last week’s unemployment figures were posted early this morning, showing that 278,000 new claims for benefits were filed last week. This was a decline from the previous week’s total of 294,000 initial claims. The decline means the employment sector appears to have strengthened last week. However, since the 278,000 matched forecasts, it has had little impact on today’s trading.

The second report of the day was April’s Leading Economic Indicators (LEI) at 10:00 AM ET. It gave us negative news with a 0.6% jump in the indicators that attempt to predict economic activity over the next several months. Since analysts were expecting to see a 0.3% increase, we should consider this data bad news for mortgage rates. Fortunately though, this is a minor release and has had a minimal influence on today’s trading.

Tomorrow has one piece of relevant economic data, coming from the National Association of Realtors. They will give us their Existing Home Sales report at 10:00 AM ET tomorrow. This data tracks resales of existing homes in the U.S. during April, giving us a measurement of housing sector strength and mortgage credit demand. This type of data is relevant because a weakening housing sector makes broader economic growth less likely. Current forecasts are calling for a small increase in home sales between March and April. Ideally, the bond market would prefer to see a decline, indicating housing sector weakness. A large increase in sales could lead to bond weakness and a slight increase in mortgage rates Friday morning since a strengthening housing sector raises optimism about general economic growth.

Lake Tahoe Mortgage Rate Trends- May 18, 2016

Wednesday’s bond market has opened well in negative territory, continuing yesterday’s afternoon weakness. The stock markets are mixed with the Dow down 37 points and the Nasdaq up 13 points. The bond market is currently down 14/32 (1.82%), which with losses late yesterday should push this morning’s mortgage rates higher by approximately .250 of a discount point if comparing to Tuesday’s morning pricing. If your lender revised upward during afternoon hours yesterday, you likely will see less of an increase this morning.

There is nothing set for release this morning that was relevant to mortgage rates. We do have something to watch this afternoon though that can be a market mover or a non-factor. This would be the minutes of the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation or concerns about economic growth. The goal is to form opinions about the Fed’s next move regarding interest rates, which is expected to happen a couple times before the end of the year. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will be evident during mid-afternoon trading.

Tomorrow’s has two minor pieces of data scheduled for release. Last week’s unemployment figures at 8:30 AM ET will be first. They are expected to show that 278,000 new claims for unemployment benefits were filed last week, down from the previous week’s 294,000. Rising initial claims are a sign of employment sector weakness, so the larger the number of claims, the better the news it is for mortgage rates. Although, because this is only a weekly reading we usually need to see a significant variance from forecasts for it to impact mortgage rates.

The second report of the day will be April’s Leading Economic Indicators (LEI) at 10:00 AM ET tomorrow. This Conference Board report attempts to predict economic activity over the next three to six months. It is expected to show a 0.3% increase from March’s reading, meaning that economic activity is likely to strengthen over the next few months. A decline would be good news for the bond market and mortgage rates, while a much larger increase could cause mortgage rates to inch higher.

Lake Tahoe Mortgage Rate Trends- May 17, 2016

Tuesday’s bond market has opened in positive territory despite stronger than expected economic news. The stock markets are showing moderate losses with the Dow down 57 points and the Nasdaq down 17 points. The bond market is currently up 4/32, but due to weakness yesterday afternoon, we should see little change in this morning’s mortgage rates.

There were three pieces of economic data posted this morning. The first was April’s Consumer Price Index (CPI) at 8:30 AM ET. It showed a 0.4% increase in the overall reading a 0.2% rise in the more important core data. The increase in the overall reading slightly exceeded forecasts but the core reading pegged expectations. Therefore, we can consider the data neutral to slightly negative for bonds and mortgage rates.

April’s Housing Starts was also posted early this morning. The Commerce Department announced a 6.6% jump in new home groundbreakings. This was a larger than expected rise, hinting at housing strength. Fortunately, this is not considered to be a highly important report and has had a minimal impact on today’s trading.

The third piece and final report of the morning was April’s Industrial Production report at 9:15 AM ET. It showed a 0.7% increase in output at U.S. factories, mines and utilities, exceeding forecasts of a 0.2% rise. This news indicates that the manufacturing sector may be gaining strength, making the report bad news for mortgage rates. However, since this report is considered to be only moderately important, it apparently has also had little influence on this morning’s rates.

There is no relevant economic data set for release tomorrow morning, but the afternoon brings us the minutes of the last FOMC meeting. Market participants will be looking for how Fed members voted during the last meeting and any comments about inflation or concerns about economic growth. The goal is to form opinions about the Fed’s next move regarding interest rates, which is expected to happen sometime a couple times before the end of the year. Since the minutes will be released at 2:00 PM ET, if there is a market reaction to them it will be evident during afternoon trading tomorrow.

Lake Tahoe Mortgage Rate Trends- May 16, 2016

Monday’s bond market has opened in negative territory, erasing gains from late Friday. The stock markets are starting the week in positive ground with the Dow up 69 points and the Nasdaq up 21 points. The bond market is currently down 13/32 (1.74%), but due to strength Friday afternoon we should see little change in this morning’s mortgage rates if comparing to Friday’s early pricing. If your lender revised rates lower Friday afternoon, you may see an increase this morning by the same amount.

There is nothing of importance set for release today. It is the only day of the week that has nothing scheduled that is relevant to mortgage rates. The rest of the week brings us the release of five pieces of economic news in addition to the minutes from the most recent FOMC meeting. Only one of the economic reports is considered to be highly important to the markets and mortgage rates, but a couple do carry enough significance to influence mortgage rates if they show a wide variance from forecasts.

The majority of the data comes tomorrow morning with three releases set. April’s Consumer Price Index (CPI) will kick off the week’s calendar at 8:30 AM ET tomorrow. This is the sister report of last week’s PPI report, but measures inflationary pressures at the more important consumer level of the economy. These results will be watched closely and could lead to significant volatility in the bond market and mortgage pricing if they show any significant surprises. Current forecasts are calling for a 0.3% increase in the overall index and a 0.2% rise in the core data reading. The core data is the more important of the two readings as it excludes more volatile food and energy prices. This data can also affect the Fed’s timeline for raising key short-term interest rates and will also help dictate mortgage rate direction.

April’s Housing Starts will also be posted early tomorrow morning. This report will give us an indication of housing sector strength and mortgage credit demand by tracking newly issued permits and actual starts of new home construction. It is expected to show an increase in new construction starts from March’s reading, hinting at housing sector growth. However, since this report is not considered to be of high importance to the bond market, it likely will have little impact on mortgage rates unless it varies greatly from forecasts and the CPI matches expectations.

The third piece of data tomorrow is April’s Industrial Production report at 9:15 AM ET. It measures manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to show a 0.2% increase in production, indicating that manufacturing activity strengthened slightly. A decline in output would be good news for the bond market and mortgage rates because it would indicate that the manufacturing sector is not as strong as thought. This report is considered to be moderately important, so it will likely need to show unexpected strength or weakness to cause movement in mortgage rates.

Overall, I believe tomorrow will be the most important day for rates due to the data being posted. Wednesday afternoon could also be pretty active if the minutes show anything of importance. The calmest day will likely be Thursday. Despite a relatively light calendar, I still recommend maintaining contact with your mortgage professional if you have not locked an interest rate yet as conditions can change at any time.