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Lake Tahoe Mortgage Rate Trends- April 27, 2016

Wednesday’s bond market has opened in positive territory as traders prepare for today’s Fed meeting. The stock markets are showing minor weakness with the Dow and Nasdaq down 39 and 43 points respectively. The bond market is currently up 11/32 (1.89%), which should keep this morning’s mortgage rates at yesterday’s levels.

We saw some weakness in bonds late yesterday despite a fairly decent 5-year Treasury Note auction. The benchmarks we use to gauge investor demand in the sales showed an above average interest in the securities. That leads me to believe that the selling was not related to the auction. For whatever the reason, we did see some lenders revise rates slightly higher during afternoon trading but the changes were not widespread. This morning’s bond gains simply put rates back where they were yesterday morning. If your lender did not revise intraday yesterday, you likely will not see much of a change in this morning’s pricing.

This morning has no relevant economic data for the markets to digest. We do however, have the adjournment of the two-day FOMC meeting this afternoon. It is widely expected that it will yield an announcement of no change to key short-term interest rates. What market participants will be looking for is an indication of when the Fed expects to adjust key rates again. Any surprises should create plenty of volatility, possibly leading to a sizable change in mortgage rates this afternoon. The adjournment will be at 2:00 PM ET, so any reaction will come during mid-afternoon trading. This meeting will not be followed by a Fed press conference or economic projections.

There is data scheduled for release tomorrow, including the extremely important initial GDP reading. We will be updating today’s report shortly after the markets have a chance to react to the post-meeting statement. Tomorrow’s releases will be included in that afternoon revision.

Lake Tahoe Mortgage Rate Trends- April 26, 2016

Tuesday’s bond market has opened flat again even though we saw two favorable pieces of economic data. The stock markets are fairly calm also with the Dow up 26 points and the Nasdaq up 6 points. The bond market is currently down 1/32 (1.91%), which should keep this morning’s mortgage rates at yesterday’s levels.

March’s Durable Goods Orders was the first of this morning’s two relevant economic report. The Commerce Department announced at 8:30 AM ET that new order for big-ticket items rose 0.8% at U.S. factories last month, falling short of the 1.7% that was expected. Even a secondary reading that excludes more volatile products such as orders for new airplanes came in much lower than forecasts (-0.2% vs +0.5%). The data signals that the manufacturing sector is not as strong as many had thought, making the data good news for bonds and mortgage rates. This is a pretty important report, so it is a bit surprising that we have not seen a more positive reaction to the data.

April’s Consumer Confidence Index (CCI) was released at 10:00 AM ET by the Conference Board. This non-governmental agency said their CCI stood at 94.2 this month. That was well below forecasts of 96.7 and was decline from March’s revised 96.1. What that means is that fewer surveyed consumers were comfortable with their personal financial situations than were in March. Because waning confidence usually translates into softer levels of consumer spending and weaker economic growth, this is report is also good news for mortgage rates.

Today also has the first of two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. 5-year Treasury Notes are being sold today while 7-year Notes go 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 government securities more attractive to investors and bring 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.

There is no influential economic data being posted tomorrow, but we do have the FOMC meeting adjournment mid-afternoon. It will likely adjourn with an announcement of no change to key short-term interest rates, but we may see some volatility in the markets following the post-meeting statement. If the statement gives any hint of change in their current forecasts on when they expect to adjust key short-term interest rates again, we could see a sizable change to mortgage rates tomorrow afternoon. This meeting will not be followed by a Fed press conference or economic projections.

Lake Tahoe Mortgage Rate Trends- April 25, 2016

Monday’s bond market has opened fairly flat despite favorable data and a weak open in stocks. The major stock indexes are starting the week with sizable losses, pushing the Dow lower by 128 points and the Nasdaq down 19 points. The bond market is currently up 1/32 (1.89%), which should keep this morning’s mortgage rates at Friday’s levels.

Today’s only economic data was March’s New Home Sales numbers at 10:00 AM ET. The Commerce Department reported that sales of newly constructed homes fell 1.5% last month when analysts were expecting to see a small increase in sales. This news indicates the new home portion of the housing sector was softer than many had thought, making it good news for bonds and mortgage rates. However, this is a minor report that doesn’t draw too much attention, preventing it from helping mortgage rates this morning.

The rest of the week brings us the release of six more economic reports that may affect mortgage rates in addition to an FOMC meeting and a couple Treasury auctions. One those reports is considered to be extremely important to the financial and mortgage markets and can cause a great deal of volatility. Throw in the FOMC meeting and we have the makings of a highly important week, not only for mortgage rates but also for the broader financial markets.

Tomorrow has two of those reports scheduled, starting with March’s Durable Goods Orders at 8:30 AM ET. This important Commerce Department report gives us an indication of manufacturing sector strength by tracking orders for big-ticket items at U.S. factories. These are products that are expected to last three or more years, such as appliances, electronics and airplanes. Current forecasts are calling for an increase in new orders of 1.7%. This would be a sign of manufacturing sector strength, but this data can be quite volatile from month-to-month. Therefore, a small variance between forecasts and the actual results will not heavily influence the markets or mortgage rates. A large decline would be considered good news for bonds and mortgage pricing, while a large rise would indicate strength in the sector. A sign of solid manufacturing growth could lead to higher mortgage rates tomorrow.

April’s Consumer Confidence Index (CCI) will also be posted tomorrow, but at 10:00 AM ET. This index is considered to be an indicator of future spending by consumers. The Conference Board surveys 5,000 consumers from across the country about their personal financial situations. If sentiment is strong or rising, it is believed that consumers are more apt to make large purchases in the near future. However, if they are concerned about issues such as job security and savings, they will probably delay making large purchases. The latter is better for the bond market and mortgage rates because the expected slowdown in spending would keep inflation and economic growth to a minimum. On the other hand, a sizable increase could hurt the bond market, pushing mortgage rates higher tomorrow. It is expected to show a reading of 96.7, which would be an increase from March’s 96.2 reading. The lower the reading, the better the news it is for mortgage rates.

In addition to this week’s economic reports, there are two relatively important Treasury auctions that may also influence bond trading enough to affect mortgage rates. There will be an auction of 5-year Treasury 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 sales usually make government securities more attractive to investors and bring 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.

Overall, I am expecting it to be a pretty active week for the markets and mortgage rates. We have several days that appear likely to be particularly volatile. Wednesday looks to be the best candidate for most important due to the FOMC meeting but Thursday’s GDP reading can easily be a market-mover. Tomorrow may be active also. Therefore, if still floating an interest rate and closing in the near future, I strongly recommend maintaining contact with your mortgage professional this week.

Lake Tahoe Mortgage Rate Trends- April 22, 2016

Friday’s bond market has opened in negative territory again as the general negative momentum continues. Stocks are showing losses with the Dow down 30 points and the Nasdaq down 56 points. The bond market is currently down 7/32 (1.88%), but due to some strength late yesterday we shouldn’t see much of a change in this morning’s mortgage rates.

There is nothing of importance scheduled for release today. If we see an intraday change to mortgage rates, it likely will be a result of a sizable move in stocks. If the major stock indexes extend their morning losses like we saw yesterday, we may see bonds strengthen and mortgage rates improve slightly. On the other hand, stock strength could lead to an intraday increase in mortgage pricing.

Next week is much busier than this week was in terms of relevant economic releases and other events that have the potential to influence the financial and mortgage markets. Besides a handful of reports that include the initial GDP reading for last quarter, we also have an FOMC meeting and a couple of Treasury auctions to deal with. There is a strong possibility of seeing a fair amount of volatility in the markets and mortgage rates next week.

Unlike many Mondays, there is a piece of economic news scheduled for release this coming Monday. We will get March’s New Home Sales figures late Monday morning, giving us a small measure of housing sector strength. This report is not considered to be highly important and usually takes a wide variance from forecasts for it to directly affect rates. Look for details on it and the rest of the week’s calendar in Sunday evening’s weekly preview.

Lake Tahoe Mortgage Rate Trends- April 21, 2016

Thursday’s bond market has opened in negative territory, extending yesterday’s afternoon selling. The stock markets are showing minor losses of 32 points in the Dow and 1 point in the Nasdaq. The bond market is currently down 6/32 (1.86%), which with yesterday’s afternoon weakness should push this morning’s mortgage rates higher by approximately .250 of a discount point if comparing to Wednesday’s early pricing.

We saw bond prices start a downward slide early yesterday afternoon that accelerated as the afternoon progressed. This led to widespread upward revisions to mortgage pricing before the day ended. Just how much of an increase you will see depends on the size of the revision your lender made late yesterday.

The first of this morning’s two pieces of relevant economic data was last week’s unemployment numbers at 8:30 AM ET. They showed that the number of new filings for benefits fell to 247,000. This was a decline from the previous week’s 253,000 initial claims and well short of the 263,000 that was expected. The weaker number of claims indicates that the employment sector strengthened last week, making the data negative for the bond and mortgage markets.

Also posted this morning was March’s Leading Economic Indicators (LEI). The Conference Board announced at 10:00 AM that their LEI rose 0.2% last month, falling short of the 0.4% increase that was expected. A downward revision to February’s reading also allows us to label this news as favorable for bonds. Unfortunately, this data just isn’t important enough to offset the current negative momentum in the bond market.

Tomorrow has nothing of importance scheduled for release. Based on what we have seen since yesterday morning, we can expect to see a little more volatility tomorrow as this move in yields settles. We are now in the upper part of the recent range of the benchmark 10-year Treasury Note yield, but still below a critical threshold that raises concern on mortgage rate direction. As long as we stay well away from 2.00%, the likelihood of seeing a large upward move in rates is fairly minimal in my opinion.

Lake Tahoe Mortgage Rate Trends- April 20, 2016

Wednesday’s bond market has opened up slightly following the lead of stocks. The major stock indexes are calm with the Dow up 7 points and the Nasdaq up 6 points. The bond market is currently up 3/32 (1.77%), which should keep this morning’s mortgage rates at yesterday’s levels.

Today’s sole relevant economic report was March’s Existing Homes Sales at 10:00 AM ET. The National Association of Realtors announced that home resales rose 5.1% last month, coming close to expectations. This is a sign of housing sector strength, but since it didn’t show much of a surprise and the report is considered to be moderately important, the news did not affect today’s mortgage rates.

Tomorrow has two pieces of data, but neither are considered to be of much concern. The first is last week’s unemployment update at 8:30 AM ET. It will give us a small snapshot of the employment sector and is expected to show that 263,000 new claims for unemployment benefits were filed last week, up from the previous week. The higher the number of claims, the better the news it is because rising claims hints at a softening labor market. However, since this is only a weekly report, it likely will not have much of an impact on mortgage rates unless it shows a significant variance from forecasts.

The third and final monthly release of the week will come from the Conference Board at 10:00 AM tomorrow morning when they post their Leading Economic Indicators (LEI) for March. This data attempts to predict economic activity over the next three to six months. It is also considered to be only a moderately important report, so at best we can expect to see a slight movement in rates as a result of this data. It is expected to show a 0.4% increase from February’s reading, meaning it is predicting moderate growth in economic activity over the next several months. A decline would be considered good news for the bond market and could lead to slightly lower mortgage rates.

Lake Tahoe Mortgage Rate Trends- April 19, 2016

Tuesday’s bond market has opened down slightly even though we got some favorable economic news this morning. Stocks are mixed again with the Dow up 76 points and the Nasdaq down 8 points. The bond market is currently down 3/32 (1.78%), which should keep this morning’s mortgage rates very close to yesterday’s early pricing.

There was only one piece of economic data released this morning. The Commerce Department announced that March’s Housing Starts fell a surprising 8.8%. Analysts were expecting to see a decline, but a very small drop in new groundbreakings. This size of a decline raises concerns about the new home portion of the housing sector. Since housing sector weakness makes it more difficult for the broader economy to expand, this is good news for bonds and mortgage rates. Unfortunately, this particular report is not considered to be highly important to the markets, so its impact on today’s mortgage pricing has been hard to notice.

We get more housing news tomorrow morning with the release of March’s Existing Homes Sales numbers from the National Association of Realtors. This 10:00 AM ET report will give us an indication of housing sector strength and mortgage credit demand. It is considered to be moderately important to the markets, but can influence mortgage pricing if it shows a sizable variance from forecasts. Ideally, the bond market would like to see a drop in home resales because soft housing undermines economic growth and makes long-term securities such as mortgage-related bonds more attractive to investors. Analysts are expecting to see an increase in sales between February and March. The larger the increase, the worse the news it is for bonds and mortgage rates.

There is no economic data or other events scheduled the rest of the week that we should be too concerned with. If we see a drastic move in bonds and mortgage rates, it will likely come as a result of a significant move in stocks. Since we are in corporate earnings season, such a move is certainly possible. However, I still believe we are likely to see a fairly calm week in rates.

Lake Tahoe Mortgage Rate Trends- April 18, 2016

Monday’s bond market has opened in negative territory despite a calm open in stocks and no relevant economic news. The major stock indexes are mixed at the moment with the Dow up 13 points and the Nasdaq down 6 points. The bond market is currently down 6/32 (1.77%), but due to a little strength in trading late Friday, we should see this morning’s mortgage rates nearly unchanged.

There is nothing scheduled for release today that is expected to influence mortgage rates. In fact, the rest of the week has only three pieces of monthly economic data that have the potential to influence mortgage rates, none of which are considered to be key or highly important reports. All of them are set to be posted the middle days, so we could see the most movement in rates mid-week. We also need to watch stocks since we are still in corporate earnings season. There is nothing of importance scheduled for tomorrow, meaning we can look towards stocks to help determine bond and mortgage rate direction.

March’s Housing Starts will start the week’s releases early tomorrow morning. This report tracks groundbreakings of new home construction, giving us a measurement of housing sector strength and future demand for mortgage credit. It is not considered to be highly important to the markets but does draw enough attention to influence trading if it reveals surprisingly strong or weak numbers. The report will be posted at 8:30 AM ET and is expected to show a small decline in starts from February to March. Good news for mortgage rates would be a sizable decline in starts that points toward housing sector weakness.

Overall, there is nothing scheduled this week that is expected to create much volatility or be a market mover. Chances are decent that we will see a fairly calm week for mortgage rates unless stocks make a significant move or something unexpected happens. I don’t see any particular day as a good candidate for most important of the week. Still, despite the lack of key economic data, it would still be prudent to maintain contact with your mortgage professional if floating an interest rate and market conditions can change at any time.

Lake Tahoe Mortgage Rate Trends- April 17, 2016

This week has only three pieces of economic data scheduled for release that have the potential to influence mortgage rates, none of which are considered to be key or highly important reports. All of them are set to be posted the middle days, so we could see the most movement in rates mid-week. We also need to watch stocks since we are still in corporate earnings season. There is nothing of importance scheduled for tomorrow, meaning we can look towards stocks to help determine bond and mortgage rate direction early in the week.

March’s Housing Starts will start the week’s releases early Tuesday morning. This report tracks groundbreakings of new home construction, giving us a measurement of housing sector strength and future demand for mortgage credit. It is not considered to be highly important to the markets but does draw enough attention to influence trading if it reveals surprisingly strong or weak numbers. The report will be posted at 8:30 AM ET and is expected to show a small decline in starts from February to March. Good news for mortgage rates would be a sizable decline in starts that points toward housing sector weakness.

Next up is March’s Existing Homes Sales numbers from the National Association of Realtors at 10:00 AM ET Wednesday. This report gives us an indication of housing sector strength and mortgage credit demand. It is considered to be moderately important to the markets, but can influence mortgage pricing if it shows a sizable variance from forecasts. Ideally, the bond market would like to see a drop in home resales because a soft housing sector makes broader economic growth more difficult. Analysts are expecting to see an increase in sales between February and March. The larger the increase, the worse the news it is for bonds and mortgage rates.

The third and final monthly release will come from the Conference Board late Thursday morning when they post their Leading Economic Indicators (LEI) for March. This data attempts to predict economic activity over the next three to six months. It is also considered to be only a moderately important report, so at best we can expect to see a slight movement in rates as a result of this data. It is expected to show a 0.4% increase from February’s reading, meaning it is predicting moderate growth in economic activity over the next several months. A decline would be considered good news for the bond market and could lead to slightly lower mortgage rates.

Overall, there is nothing scheduled this week that is expected to create much volatility or be a market mover. Chances are decent that we will see a fairly calm week for mortgage rates unless stocks make a significant move or something unexpected happens. I don’t see any particular day as a good candidate for most important of the week. Still, despite the lack of key economic data, it would still be prudent to maintain contact with your mortgage professional if floating an interest rate and market conditions can change at any time.

Lake Tahoe Mortgage Rate Trends- April 15, 2016

Friday’s bond market has opened in positive territory due to weaker than expected economic data. The stock markets are fairly calm but showing minor losses with the Dow down 28 points and the Nasdaq down 12 points. The bond market is currently up 12/32 (1.75%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

Yesterday’s 30-year Bond auction followed suit of Wednesday’s 10-year sale by drawing a strong level of investor interest. However, yesterday’s auction results did not have the positive impact on the bond market that Wednesday’s sale did. Despite most of the benchmarks we use to gauge investor demand showing a strong level of interest in the securities, the broader bond market didn’t really have much a reaction after results were posted at 1:00 PM ET. Therefore, we had no intraday revision to mortgage pricing.

The first of this morning’s two relevant economic reports was March’s Industrial Production data at 9:15 AM ET. It showed a 0.6% decline in output at U.S. factories, mines and utilities, indicating manufacturing sector weakness. Analysts were expecting to see little change in production, so we can consider the data good news for bonds and mortgage rates. This is especially true since February’s production calculation was revised lower from down 0.5% to also down 0.6%.

Late this morning, the University of Michigan’s Index of Consumer Sentiment was posted, coming in at 89.7. This was well below expectations of 91.9 and was a decline from March’s 91.0. This reading means fewer surveyed consumers felt better about their personal financial and employment situations than many had thought. Because waning confidence usually means weaker consumer spending levels, this is also good news for the bond and mortgage markets.

Next week has only a couple of economic reports worth watching. The theme is mostly housing, which doesn’t usually cause significant movement in the markets or mortgage pricing. There is nothing of importance set for Monday. Look for details on next week’s calendar in Sunday evening’s weekly preview.