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Lake Tahoe Mortgage Rate Trends-November 20, 2014

Thursday’s bond market has opened in positive territory despite a mixed open in stocks and relatively unfavorable economic data. The Dow is currently down 27 points while the Nasdaq is up 12 points. The bond market is currently up 5/32 (2.34%), but due to some weakness late yesterday we should see little change in this morning’s mortgage rates if comparing to Wednesday’s morning pricing.

There were four economic reports posted this morning but only one of them was considered to be key or highly important to the markets. The first, October’s Consumer Price Index (CPI), was the most important of them. The Labor Department reported at 8:30 AM ET that the overall CPI reading was unchanged from September’s level while the more important core data rose 0.2%. Both readings exceeded forecasts by 0.1%, meaning inflationary pressures at the consumer level of the economy were slightly stronger than analysts were expecting. That makes the data slightly negative for mortgage rates.

Last week’s unemployment figures were also posted early this morning. They revealed that 291,000 new claims for unemployment benefits were filed last week, down from the previous week’s revised 293,000 initial claims. The weekly decline was smaller than expected, but the number of claims ends up higher than forecasted because of the upward revision to the previous week. Therefore, we should consider the news neutral to slightly positive for mortgage rates.

The third report of the morning came from the National Association of Realtors at 10:00 AM. They announced that home resales rose last month to their highest level since September 2013. The 1.5% increase was stronger than the no change that was expected, but not enough of a variance to cause much concern in the bond market. The increase in sales points to a slight increase in housing sector strength, meaning the data is slightly negative for mortgage rates.

The final report of the week came from the Conference Board at 10:00 AM ET. They said their Leading Economic Indicators (LEI) for October rose 0.9%. That was a larger increase than analysts were expecting. This means the data is predicting a pretty rapid rate of economic growth over the next several months. Accordingly, we need to consider the report bad news for bonds and mortgage rates. Fortunately, this isn’t a highly influential report and has had a minimal impact on this morning’s rates.

There is nothing of relevance scheduled for release tomorrow, so we will be looking towards stock movement and overseas economic news for mortgage rate direction. If stocks show solid gains, we can expect bonds to move into negative ground and mortgage rates to move a little higher. On the other hand, stock weakness should help boost bonds and possibly improve mortgage pricing tomorrow.

Lake Tahoe Mortgage Rate Trends- November 19, 2014

Wednesday’s bond market has opened in negative territory despite early weakness in stocks and mixed economic news. The Dow is currently down 38 points while the Nasdaq has lost 41 points. The bond market is currently down 9/32 (2.34%), which will likely push this morning’s mortgage rates higher by approximately .125 – .250 of a discount point.

This morning’s only economic data was October’s Housing Starts at 8:30 AM ET. The Commerce Department reported that new home construction starts fell 2.8% last month, falling short of expectations. That is a good sign because it hints at housing sector weakness, not growth. However, a secondary reading that tracks new permits issued and gives us an indication of future construction starts exceeded forecasts. That changed the data from favorable for mortgage rates to neutral.

The minutes from the last FOMC meeting will be posted later today. Traders will be looking for any indication of the Fed’s next move regarding monetary policy, particularly when the first rate increase will come. They will be released at 2:00 PM ET, so any reaction will come during afternoon trading. This release is one of those that may cause some volatility in the markets after they are posted, or could be a non-factor. If they show anything surprising, we may see some movement in rates this afternoon.

Tomorrow actually has four reports scheduled that have the potential to affect mortgage rates. The first is the most important of the three. That is October’s Consumer Price Index (CPI) from the Labor Department at 8:30 AM ET. The CPI measures inflationary pressures at the consumer level of the economy and is one of the more important reports the bond market sees each month. If it reveals stronger than expected readings, indicating that inflationary pressures are rising at the consumer level, the bond market will probably react negatively and cause mortgage rates to move higher. Analysts are expecting to see a 0.1% decline in the overall reading and a 0.1% increase in the core data.

Also at 8:30 AM ET will be the weekly unemployment update. It is expected to show that 285,000 new claims for unemployment benefits were filed last week. This would be a decline from the previous week’s 290,000. The higher the number of initial claims, the better the news it is for the bond and mortgage markets because rising claims indicates a softening employment sector. However, since this is a weekly report instead of a monthly or quarterly tracking period, it usually takes a wide variance from forecasts for the data to influence mortgage rates.

The third report of the morning will be October’s Existing Home Sales data from the National Association of Realtors at 10:00 AM. It gives us a measurement of housing sector strength and mortgage credit demand by tracking home resales in the U.S. This report is expected to show little change, meaning the housing sector was flat last month. That would be relatively good news for the bond market and mortgage pricing, but unless it shows a significant surprise, it will likely not have a major impact on mortgage rates.

The final report of the week will come from the Conference Board, also at 10:00 AM ET tomorrow, when they release their Leading Economic Indicators (LEI) for October. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.6% increase, meaning economic activity will likely rise fairly quickly over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to miss forecasts by a wide margin from forecasts for it to affect mortgage rates.

Lake Tahoe Mortgage Rate Trends- November 18, 2014

Tuesday’s bond market has opened in positive territory even though this morning’s key inflation data gave us unfavorable results. The stock markets are showing minor gains with the Dow up 22 points while the Nasdaq has gained 23 points. The bond market is currently up 5/32 (2.32%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

October’s Producer Price Index (PPI) was posted at 8:30 AM ET this morning, revealing a 0.2% increase in the overall reading and a 0.4% rise in the core data. Both readings exceeded forecasts of -0.2% and +0.1% respectively, indicating inflationary pressures at the producer level of the economy are stronger than many had thought. Because bonds tend to thrive in weaker economic conditions with low inflation, we should consider this data negative for the bond and mortgage markets. Fortunately though, the news has drawn little reaction during early trading.

Tomorrow morning has one economic report that may have an impact on mortgage rates. That will be October’s Housing Starts at 8:30 AM tomorrow. This report gives us an indication of housing sector strength, but usually does not cause a noticeable in mortgage rates. I don’t expect this month’s version to be any different unless it varies greatly from analysts’ forecasts. It is expected to show an increase in starts of new homes, meaning the new home portion of the housing sector strengthened last month.

Also worth noting is the release of the minutes from the last FOMC meeting tomorrow afternoon. Traders will be looking for any indication of the Fed’s next move regarding monetary policy, particularly when the first rate increase will come. They will be released at 2:00 PM ET, so any reaction will come during afternoon trading. This release is one of those that may cause some volatility in the markets after they are posted, or could be a non-factor. If they show anything surprising, we may see some movement in rates Wednesday afternoon, but it is more likely there will be little reaction.

Lake Tahoe Mortgage Rate Trends- November 17, 2014

Monday’s bond market has opened in negative territory despite some favorable economic news and a soft open in stocks. The major stock indexes are showing fairly minor losses with the Dow down 4 points and the Nasdaq down 22 points. The bond market is currently down 4/32 (2.33%), but I don’t believe we will see much of a change in this morning’s mortgage pricing.

October’s Industrial Production data was today’s only economic news. It showed that output at U.S. factories, mines and utilities fell 0.1% last month. This was weaker than the 0.2% increase that was expected and indicates that the manufacturing sector was softer than many had thought. That makes the data good news for bonds and mortgage rates, but since this report is considered to be only moderately important to the markets, we have seen little reaction to it.

The rest of the week has five more economic reports that are relevant to mortgage rates in addition to the minutes from last month’s FOMC meeting. A couple of the reports are considered highly important to the markets, meaning we could see noticeable movement in rates more than one day. This is especially true if stocks make a noticeable move higher or lower any particular day.

Tomorrow’s only report is October’s Producer Price Index (PPI) at 8:30 AM ET, which is one of the two key inflation readings on tap this week. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Signs of rapidly rising inflation make long-term securities such as mortgage-related bonds less attractive to investors and leads to higher mortgage rates. The overall reading is expected to show a 0.2% decline from September’s level while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while a larger than forecasted increase in the core reading could lead to higher mortgage rates Tuesday morning.

Overall, the most active day of the week will probably be Thursday with three reports being posted, one of which is the most important of the six scheduled. Wednesday afternoon also has the potential to be volatile if the FOMC minutes reveal a significant surprise. The best candidate for calmest day in rates is Friday. With data set for release four of the five days, it could end up being another active week for mortgage rates. Accordingly, please maintain contact with your mortgage professional if floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- November 16, 2014

This week has six economic reports scheduled for release that are relevant to mortgage rates in addition to the minutes from last month’s FOMC meeting. A couple of the reports are considered highly important to the markets, meaning we could see noticeable movement in rates more than one day. This is especially true if stocks make a noticeable move higher or lower any particular day.

October’s Industrial Production data will start the week’s activities at 9:15 AM ET tomorrow. It gives us a measurement of manufacturing sector strength by tracking output at U.S. factories, mines and utilities. It is expected to reveal a 0.2% increase in production, indicating little strength in the manufacturing sector. Stronger levels of production would be considered bad news for the bond market and mortgage rates, but this report is not expected to greatly influence the markets. Therefore, it will likely take a sizable variance from forecasts for it to have a noticeable impact on tomorrow’s mortgage pricing.

Tuesday’s only report is October’s Producer Price Index (PPI) at 8:30 AM ET, which is one of the two key inflation readings on tap this week. There are two portions of the index that are used- the overall reading and the core data reading. The core data is the more important of the two because it excludes more volatile food and energy prices. Signs of rapidly rising inflation make long-term securities such as mortgage-related bonds less attractive to investors and leads to higher mortgage rates. The overall reading is expected to show a 0.2% decline from September’s level while the core data is expected to rise 0.1%. Weaker than expected readings would be good news for bonds and mortgage rates, while a larger than forecasted increase in the core reading could lead to higher mortgage rates Tuesday morning.

October’s Housing Starts is Wednesday’s only economic data worth watching. This report gives us an indication of housing sector strength, but usually does not have a noticeable impact on mortgage rates. I don’t expect this month’s version to be any different unless it varies greatly from analysts’ forecasts. It is expected to show an increase in starts of new homes, meaning the new home portion of the housing sector strengthened last month.

Also worth noting is the release of the minutes from the last FOMC meeting Wednesday afternoon. Traders will be looking for any indication of the Fed’s next move regarding monetary policy, particularly when the first rate increase will come. They will be released at 2:00 PM ET, so any reaction will come during afternoon trading. This release is one of those that may cause some volatility in the markets after they are posted, or could be a non-factor. If they show anything surprising, we may see some movement in rates Wednesday afternoon, but it is more likely there will be little reaction.

Thursday has three reports scheduled that may have an impact on mortgage rates. The first is the most important of the three. That is October’s Consumer Price Index (CPI) from the Labor Department at 8:30 AM ET. The CPI measures inflationary pressures at the consumer level of the economy and is one of the most important reports the bond market sees each month. If it reveals stronger than expected readings, indicating that inflationary pressures are rising at the consumer level, the bond market will probably react negatively and cause mortgage rates to move higher. Analysts are expecting to see a 0.1% decline in the overall reading and a 0.1% increase in the core data.

The second is October’s Existing Home Sales data from the National Association of Realtors at 10:00 AM. It gives us a measurement of housing sector strength and mortgage credit demand by tracking home resales in the U.S. This report is expected to show little change, meaning the housing sector was flat last month. That would be relatively good news for the bond market and mortgage pricing, but unless it shows a significant surprise, it will likely not have a major impact on mortgage rates.

The final report of the week will come from the Conference Board, also at 10:00 AM ET Thursday, when they release their Leading Economic Indicators (LEI) for October. This is a moderately important report that attempts to predict economic activity over the next three to six months. It is expected to show a 0.6% increase, meaning economic activity will likely rise fairly quickly over the next couple of months. Generally speaking, this would be bad news for bonds. However, since this data is considered only moderately important, its results need to miss forecasts by a wide margin from forecasts for it to affect mortgage rates.

Overall, the most active day of the week will probably be Thursday with three reports being posted, one of which is the most important of the six scheduled. Wednesday afternoon also has the potential to be volatile if the FOMC minutes reveal a significant surprise. The best candidate for calmest day in rates is Friday. With data set for release four of the five days, it could end up being another active week for mortgage rates. Accordingly, please maintain contact with your mortgage professional if floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- November 14, 2014

Friday’s bond market has opened down slightly due to stronger than expected economic data. The stock markets are pretty flat with the Dow down 5 points and the Nasdaq down 1 point. The bond market is currently down 3/32 (2.35%), but we still should see a slight improvement in this morning’s mortgage rates due to strength in bonds late yesterday.

This morning had two important reports released. The first came at 8:30 AM ET when the Commerce Department announced that retail-level sales rose 0.3% last month, matching forecasts. A secondary reading that excludes more volatile auto transactions also showed a 0.3% increase when analysts were expecting a 0.2% rise. This means that consumers spent more in October than they did in September, although not much more than many had thought. Still, we should consider the data neutral to slightly negative for the bond market and mortgage rates.

The final mortgage-relevant report of the week was posted just before 10:00 AM ET. This was the preliminary reading of the University of Michigan’s Index of Consumer Sentiment. It showed a reading of 89.4 that exceeded forecasts by almost two points. That indicates consumers felt stronger about their own financial situations and are likely to make a large purchase in the near future. Therefore, we should consider the news negative for mortgage rates because consumer spending fuels economic growth.

Next week is pretty busy in terms of the number of economic reports set for release. They include a couple of key inflation readings and the minutes from the most recent FOMC meeting. There is a relatively minor report being posted Monday (October’s Industrial Production), but it can influence rates slightly if it varies greatly from forecasts. Look for details on next week’s calendar in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- November 13, 2014

Thursday’s bond market has opened in positive territory despite early strength in stocks. The major stock indexes are showing relatively minor gains with the Dow up 51 points and the Nasdaq up 26 points. The bond market is currently up 4/32 (2.35%), but due to weakness late yesterday we will likely see little change in this morning’s mortgage rates if comparing to yesterday’s morning pricing.

Today’s only relevant data was last week’s unemployment figures at 8:30 AM ET. They showed that 290,000 new claims for unemployment benefits were filed last week. This was an increase from the previous week’s 278,000 initial claims, making the data favorable for bonds and mortgage rates. Unfortunately, this is only a weekly report, so its impact on today’s bond trading and mortgage pricing has been fairly minimal.

Also worth noting is today’s 30-year Bond auction that has the potential to affect rates. Yesterday’s 10-year Note auction went poorly for the most part, giving us little to be optimistic about in today’s sale. If it was met with a strong demand from investors, we should see the bond market move higher during afternoon trading today. However, another weak interest would indicate a waning appetite for longer-term U.S. securities and could lead to broader bond selling. The selling in bonds will probably result in upward revisions to mortgage rates shortly after the results are posted at 1:00 PM ET.

Tomorrow morning has two economic reports set for release that are likely to affect mortgage rates. The first is October’s Retail Sales figures from the Commerce Department at 8:30 AM tomorrow. This data measures consumer level or retail spending. It is considered extremely important to the markets because consumer spending makes up over two-thirds of the U.S. economy. It is expected to show a 0.3% increase in retail-level spending, meaning consumers spent more last month than they did in September. A larger increase in spending would be considered negative news for bonds because rising spending fuels economic growth and raises inflation concerns in the bond market. If tomorrow’s report reveals a decline in spending that indicates consumers spent less than thought, bonds should react favorably, pushing mortgage rates lower. If it shows an unexpected increase, mortgage rates will likely move higher.

The week’s economic calendar closes late tomorrow morning when November’s preliminary reading of the University of Michigan’s Index of Consumer Sentiment is posted. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 87.5, up from October’s final reading of 86.9. That would be considered negative news for bonds because rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. And with consumer spending so important, any related data is watched closely. The lower the reading, the better the news it is for mortgage shoppers.

Lake Tahoe Mortgage Rate Trends- November 12, 2014

Wednesday’s bond market has opened in positive territory after the day off for Veteran’s Day. The stock markets are showing minor losses with the Dow down 33 points and the Nasdaq down 2 points The bond market is currently up 11/32 (2.32%), which should improve this morning’s mortgage rates by approximately .125 of a discount point from Monday’s pricing.

There is no relevant economic data being posted today, but we do have the first of this week’s two important Treasury auctions taking place. The 10-year Treasury Note sale is being held today while 30-year Bonds are tomorrow. Today’s auction is the more important of the two for mortgage rates as it will give us a better indication of demand for mortgage-related securities. If these sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading today and/or tomorrow. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds will probably result in upward revisions to mortgage rates.

Results of today’s auction will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading. Look for stocks to also influence bond trading and possibly mortgage rates later today. If the major indexes make a move much higher or lower than current levels, bonds and mortgage rates could be affected. This is especially true if the auction results fail to create a move.

Tomorrow’s only relevant data is last week’s unemployment figures at 8:30 AM ET. They are expected to show that 280,000 new claims for unemployment benefits were filed last week. This would be a slight increase from the previous week’s 278,000 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- November 10, 2014

Monday’s bond market has opened in negative territory, giving back some of Friday’s gains. The stock markets are starting the week calm but flat with the Dow down 2 points and the Nasdaq up 5 points. The bond market is currently down 7/32 (2.32%), which should push this morning’s mortgage rates higher by approximately .125 of a discount point.

There is nothing of importance set for release today. If we see an intraday revision to mortgage rates it will likely be a result of a move in stocks. If the major stock indexes start moving higher, we could see pressure in bonds that lead to an upward revision to rates later today.

The bond market will be closed tomorrow in observance of the Veteran’s Day holiday, but the stock markets will be open for business. There is no early close taking place today. The bond market will reopen for regular trading Wednesday morning. Because bonds won’t be trading tomorrow and mortgage lenders will likely use this afternoon’s pricing if they are open, there will be no update to this report tomorrow.

Look for Friday to be the most active day for mortgage rates with both of this week’s economic reports scheduled, including the highly important Retail Sales report. Despite the light economic calendar, there is still a decent chance of seeing a noticeable move in rates this week. Therefore, it would prudent to maintain contact with your mortgage professional if still floating an interest rate.

Lake Tahoe Mortgage Rate Trends- November 10, 2014

This holiday-shortened week brings us the release of only two monthly or quarterly economic reports for the markets to digest along with two relevant Treasury auctions. One of those two reports is considered to be a key piece of data though. The bond market will be closed Tuesday in observance of the Veteran’s Day holiday, but the stock markets will be open for business.

The first events of the week will be the two important Treasury auctions that come Wednesday and Thursday. The 10-year Treasury Note sale Wednesday is the more important of the two for mortgage rates as it will give us a better indication of demand for mortgage-related securities. If the sales are met with a strong demand from investors, we should see the bond market move higher during afternoon trading the days of the auctions. But a lackluster interest from buyers, particularly international investors, would indicate a waning appetite for longer-term U.S. securities and lead to broader bond selling. The selling in bonds would probably result in upward revisions to mortgage rates.

The Commerce Department will give us October’s Retail Sales figures early Friday morning. This data measures consumer level or retail spending. It is considered extremely important to the markets because consumer spending makes up over two-thirds of the U.S. economy. It is expected to show a 0.3% increase in retail-level spending, meaning consumers spent more last month than they did in September. A larger increase in spending would be considered negative news for bonds because rising spending fuels economic growth and raises inflation concerns in the bond market. If Friday’s report reveals a decline in spending that indicates consumers spent less than thought, bonds should react favorably, pushing mortgage rates lower. If it shows an unexpected increase, mortgage rates will likely move higher.

The week’s economic calendar closes late Friday morning when November’s preliminary reading of the University of Michigan’s Index of Consumer Sentiment is posted. This index measures consumer confidence, which gives us an indication of consumer willingness to spend. It is expected to show a reading of 87.5, up from October’s final reading of 86.9. That would be considered negative news for bonds because rising sentiment means consumers are more optimistic about their own financial situations and are more likely to make large purchases in the near future. And with consumer spending so important, any related data is watched closely. The lower the reading, the better the news it is for mortgage shoppers.

Overall, Friday is likely to be the most active day for mortgage rates with all of this week’s data scheduled, including the highly important Retail Sales report. The calmest will probably be Tuesday since I see many lenders being open for business despite the bond market closure. There is a good possibility of seeing a fairly calm day tomorrow also as some bond trading firms may be on skeleton staff ahead of the holiday Tuesday. Despite the light economic calendar, there is still a decent chance of seeing a noticeable move in rates this week. Therefore, it would prudent to maintain contact with your mortgage professional if still floating an interest rate.