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Lake Tahoe Mortgage Rate Trends- October 1, 2014

Wednesday’s bond market has opened well in positive territory following sizable losses in stocks and weaker than expected results in one of this week’s two key economic reports. The Dow is currently down 163 points while the Nasdaq has lost 45 points. The bond market is currently up 19/32 (2.42%), which should improve this morning’s mortgage rates by approximately .250 of a discount point.

September’s ADP Employment report was posted at 8:15 AM ET this morning, revealing an increase of 213,000 private sector payrolls. This was a little more than the 205,000 that analysts were expecting to see, hinting that the employment sector may be stronger than many had thought. By theory, that makes the data bad news for bonds and mortgage rates. Apparently though, bond traders aren’t too concerned about the news with stocks in selling mode.

The Institute for Supply Management (ISM) announced at 10:00 AM ET that their manufacturing index fell to 56.6 in September. This was nearly two points below latest forecasts and more of a decline from August’s 59.0. That means that fewer surveyed manufacturers felt business improved during September than did in August, making the data clearly positive for bonds and mortgage rates. This data has helped extend this morning’s early bond gains.

Tomorrow has two more pieces of economic data have may have an impact on mortgage rates, but neither is considered to be highly important. The first is the weekly unemployment update that is expected to show 297,000 new claims for unemployment benefits were filed last week. This would be an increase of 4,000 initial claims, indicating the employment sector softened last week. The higher the number of new claims, the better the news it is for mortgage rates. However, since this is only a weekly snapshot of the sector, it usually takes a wide variance from forecasts for it to cause a move in mortgage rates.

Also tomorrow will be August’s Factory Orders data at 10:00 AM ET. This Commerce Department 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 impact the bond market enough to change mortgage rates if it varies from forecasts by a wide margin. Analysts are forecasting a decline of 9.3% in new orders, meaning manufacturing activity slowed in August. This would be good news for the bond market and mortgage pricing. However, I believe we will need to see a much larger decline for this report to cause a noticeable improvement in rates, partly because the data is skewed from a large spike in airplane orders during July.

Lake Tahoe Mortgage Rate Trends-September 30, 2014

Tuesday’s bond market has opened down slightly following much weaker than forecasted economic news. The stock markets are flat with the Dow and Nasdaq both just a couple points from yesterday’s closing levels. The bond market is currently down 3/32 (2.49%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.

Today’s only relevant economic data came late this morning when the Conference Board released this month’s Consumer Confidence Index (CCI) at 10:00 AM ET. It showed a reading of 86.0 that was well short of expectations. Analysts were calling for a reading of 92.0, meaning surveyed consumers were less optimistic about their own financial and employment situations than many had thought. That is good news for bonds because waning confidence usually means consumers are less likely to make a large purchase in the near future, helping to limit economic growth.

Tomorrow has two reports scheduled for release that are likely to affect mortgage pricing. First up 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.

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 59.0 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 58.3, meaning sentiment fell short of expectations, we should see the bond market move higher and mortgage rates fall tomorrow morning.

Lake Tahoe Mortgage Rate Trends- September 29, 2014

Monday’s bond market has opened in positive territory despite slightly stronger than expected economic data. The major stock indexes are showing early weakness with the Dow down 56 points and the Nasdaq down 4 points. The bond market is currently up 11/32 (2.49%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

August’s Personal Income and Outlays report was released early this morning, revealing a 0.3% rise in income and a 0.5% increase in spending. The income reading pegged forecasts but the spending exceeding expectations by 0.1%. That makes the data slightly negative for the bond market and mortgage rates. However, it has had only a minimal impact on this morning’s mortgage pricing.

Tomorrow also has one report to be concerned with. The Conference Board will post their Consumer Confidence Index (CCI) for September at 10:00 AM ET tomorrow morning. This report gives us a measurement of consumer willingness to spend. It is expected to show a slight decline in confidence from last month’s reading, indicating that consumers were a little 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 92.0, down from August’s 92.4 reading. The smaller the reading, the better the news for the bond market and mortgage rates.

Overall, I suspect 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 Wednesday 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 Thursday 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 28, 2014

This week brings us the release of five 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.

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 0.3% in income and a 0.4% 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 slight decline in confidence from last month’s reading, indicating that consumers were a little 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 92.0, down from August’s 92.4 reading. The smaller the reading, the better the news for the bond market and mortgage rates.

Wednesday has two reports scheduled that we need to watch. The ADP Employment report for September is first, set for release 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 202,000 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 Wednesday. 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 59.0 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 58.5, meaning sentiment fell short of expectations, we should see the bond market move higher and mortgage rates fall Wednesday.

Thursday’s monthly economic data will come from the Commerce Department, who will post August’s Factory Orders data at 10:00 AM ET. 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 impact the bond market enough to change mortgage rates if it varies from forecasts by a wide margin. Analysts are forecasting a decline of 9.3% in new orders, meaning manufacturing activity slowed in August. This would be good news for the bond market and mortgage pricing. However, I believe we will need to see a much larger decline for this report to cause a noticeable improvement in rates, partly because the data is skewed from a large spike in airplane orders during July.

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 6.1%, an increase of 210,000 new jobs from August’s level and a 0.2% increase in earnings.

Overall, I suspect 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 Wednesday 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 Thursday 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 26, 2014

Friday’s bond market has opened in negative territory, erasing a good part of yesterday’s gains. The stock markets are showing fairly noticeable gains after yesterday’s sell-off. The Dow is currently up 73 points while the Nasdaq has gained 17 points. The bond market is currently down 9/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point over yesterday’s morning pricing.

The first of today’s two pieces of economic data was the second revision to the 2nd Quarter Gross Domestic Product (GDP) at 8:30 AM ET. It came in at up 4.6% as it was expected to do and was an upward revision to the previous estimate of 4.2%, meaning the economy was a little stronger last quarter than previously thought. That makes the data negative for bonds and mortgage rates.

The second report of the day was the University of Michigan’s revised Index of Consumer Sentiment for September. It showed a reading of 84.6 that matched the preliminary estimate announced earlier this month. Analysts were expecting to see a small increase, meaning consumer confidence in their financial and employment situations was better than previously thought. Good news would have been a decline because waning confidence usually means consumers are less likely to make a large purchase in the near future, limiting economic growth. Because this was only a minor variance from forecasts in a moderately important report, we have not seen much of a reaction to the data in this morning’s trading or mortgage pricing.

Next week brings us plenty of economic data for the markets to digest, including a couple of extremely important reports. There is data set for release each day of the week, including Monday when August’s Personal Income and Outlays report will be posted. Look for details on next week’s events in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends-September 25, 2014

Thursday’s bond market has opened in positive territory with stocks showing sizable losses during early trading. The Dow is currently down 172 points and the Nasdaq has lost 71 points. The bond market is currently up 14/32 (2.51%), which should improve this morning’s mortgage rates by approximately .125 – .250 of a discount point. Limiting this morning’s improvement though, is weakness in bond trading late yesterday.

That weakness can partly be attributed to a weak 5-year Treasury auction yesterday. That doesn’t give us much to be optimistic about in today’s 7-year Note sale. Another auction with poor investor demand could put some pressure on bonds later this afternoon, but it appears stocks are going to drive bond trading the today. Results of the sale will be posted at 1:00 PM ET, so any reaction will come during early afternoon hours.

August’s Durable Goods Orders was this morning’s important data, revealing an 18.2% drop last month in new orders for big-ticket products at U.S. factories. While that is a sizable decline, it was expected due to a spike in airplane orders in July. If more volatile transportation-related orders are excluded, orders rose 0.7% as expected. In other words, even though this is a big headline number, it comes as no surprise to the markets. Therefore, we can consider the data neutral to slightly positive for bonds and mortgage rates.

Last week’s unemployment figures were also posted early this morning. They showed that 293,000 new claims for unemployment benefits were filed last week. This was an increase from the previous week but a little softer than the 300,000 that was expected. That also makes the news neutral for bonds, limiting any impact on this morning’s mortgage rates.

The week closes tomorrow with two more pieces of economic data for the markets to digest. The first is the final 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 generally 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 4.6%. This would be a stronger pace than the previous estimate of 4.2%, making the data negative for bonds and mortgage rates. 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 84.6 reading. Analysts are expecting to see a small upward revision, meaning consumer confidence was slightly 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 24, 2014

Wednesday’s bond market has opened down slightly following much stronger than expected economic news. The stock markets are showing modest gains with the Dow up 19 points and the Nasdaq up 8 points. The bond market is currently down 3/32 (2.53%), but due to strength late yesterday we should see little change in this morning’s mortgage rates.

The Commerce Department announced late this morning that sales of newly constructed homes rose a whopping 18.0% last month, greatly exceeding expectations. This pushed sales to their highest level in over 6 years and was the largest monthly increase in more than 22.5 years, indicating solid growth in the new home portion of the housing sector. That makes the data negative for the bond and mortgage markets, but fortunately this data is not considered highly important. Therefore, we are seeing a minimal reaction in the bond market and in today’s mortgage pricing.

Today brings us the first of this week’s two Treasury auctions that have the potential to affect 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. However, a lackluster interest from investors could lead to bond selling and higher mortgage pricing later today. The results of today’s auction will be announced at 1:00 PM ET, so any reaction will come during early afternoon trading.

Tomorrow has two pieces of relevant economic data set for release. One is much more important to the markets than the other. August’s Durable Goods Orders is the first, which is the week’s single 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 large decline in new orders, indicating weakness in the manufacturing sector. A larger decline than the 17% that is being forecasted should help boost bond prices and cause mortgage rates to drop tomorrow because signs of economic weakness make longer-term securities more appealing to investors. However, a much smaller decline or 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.

Also being posted tomorrow is last week’s unemployment figures. They are expected to show that 300,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week’s 280,000 initial claims. The larger the number of new claims, the better the news it is for mortgage rates as rising claims is a sign of employment sector weakness. However, because this report tracks only a single week’s worth of new claims, it usually takes a surprise spike or drop for it to noticeably affect mortgage rates.

Lake Tahoe Mortgage Rate Trends- September 23, 2014

Tuesday’s bond market has opened in positive territory with stocks showing early losses again and no economic data to drive trading. The major stock indexes are showing minor losses with the Dow down 31 points and the Nasdaq down 4 points. The bond market is currently up 5/32 (2.55%), which should improve this morning’s mortgage rates slightly if comparing to yesterday’s morning pricing.

There is nothing of relevance scheduled for today that is expected have an impact on mortgage rates. If we see an intra-day revision to rates, it will likely be a result of a noticeable move in stocks. If the major stock indexes move into positive ground, we could see bond prices fall and mortgage rates move higher later today. On the other hand, if they extend their current losses, we could see an improvement to mortgage rates follow.

August’s New Home Sales will be released late tomorrow 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. It 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 yesterday’s Existing Home Sales report did not.

Also tomorrow is the first of this week’s two Treasury auctions that have the potential to affect 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 will come during early afternoon trading tomorrow.

Lake Tahoe Mortgage Rate Trends-September 22, 2014

Monday’s bond market has opened in positive territory with stocks starting the week in negative ground and today’s only economic data showing favorable results. The major stock indexes are showing moderate losses with the Dow down 64 points and the Nasdaq down 53 points. The bond market is currently up 4/32 (2.56%), which with strength late Friday should improve this morning’s mortgage rates by approximately .250 of a discount point over Friday’s morning pricing.

Unlike many Mondays, we did have some economic data to digest this morning. The National Association of Realtors posted August’s Existing Home Sales report at 10:00 AM ET today. It showed a 1.8% decline in home resales last month, falling a little short of expectations. This means that the housing sector was a bit softer than many had thought, making the data slightly favorable for the bond and mortgage markets.

The rest of the week brings us the release of four more relevant economic reports for the bond market to digest in addition to two potentially influential Treasury auctions, none of which are scheduled for tomorrow. 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.

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. Friday has two reports scheduled so it deserves some consideration 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 21, 2014

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.

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 increase from July’s sales, indicating the housing sector improved slightly last month. However, this data probably will be neutral towards mortgage pricing unless its results vary greatly from forecasts.

August’s New Home Sales will be released late Wednesday 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.

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’s only monthly data is August’s Durable Goods Orders, 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 large decline in new orders, indicating weakness in the manufacturing sector. A larger decline than the 16% 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, a much smaller decline or 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.

Friday morning has the final 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 4.6%. This would be a stronger pace than the previous estimate of 4.2%, making the data negative for bonds and mortgage rates. 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 84.6 reading. Analysts are expecting to see a small upward revision, meaning consumer confidence was slightly 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.