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Lake Tahoe Mortgage Rate Trends- May 29, 2016

This holiday-shortened week brings us the release of seven relevant economic reports for the markets to digest. A couple of these reports are considered to be key data, so we may see plenty of movement in the markets and mortgage rates as a result. The financial and mortgage markets will be closed tomorrow in observance of the Memorial Day holiday and will reopen for regular trading Tuesday morning. Accordingly, we will not be updating this report tomorrow.

April’s Personal Income and Outlays data is the first of the week at 8:30 AM ET Tuesday. It gives us an indication of consumer ability to spend and current spending habits. An increase in income means that consumers have more money available to spend. Since consumer spending makes up over two-thirds of our economy, this data can cause movement in the financial markets and mortgage rates. Current forecasts are showing a 0.4% increase in income and a 0.7% rise in spending. Weaker readings would be considered good news for bonds and mortgage rates.

The Conference Board is next with their Consumer Confidence Index (CCI) at 10:00 AM Tuesday. This data measures consumer willingness to spend. If the index rises, it indicates that consumers felt better about their personal financial and employment situations and therefore are more apt to make large purchases in the near future. If confidence is sliding, analysts think consumer spending may slow in the near future. The latter is good news for the bond market because consumer spending is such a big portion of the U.S. economy. A decline in the index should boost bond prices and push mortgage rates lower Tuesday morning while a larger than expected increase would likely cause rates to move higher. It is expected to show a reading of 96.2, up from April’s 94.2 reading.

There are three reports worth watching Wednesday. The ADP Employment report is first, set for release before the markets open. It has the potential to cause some 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 very accurate in predicting results of the monthly government report that follows a couple days later. Still, because we sometimes see a reaction to the report, we should be watching it. Analysts are expecting it to show that 180,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

Also Wednesday morning, the Institute for Supply Management (ISM) will post their manufacturing index. This 10:00 AM ET release is highly important and measures manufacturer sentiment about current business conditions. One reason why it is considered so important is the fact that it is the first piece of economic data posted every month that covers the preceding month. In other words, it is the first look into the previous month’s economic conditions. That differs from many reports that aren’t released until mid or late month. A reading above 50 means that more surveyed manufacturing executives felt that business improved during the month than those who felt it had worsened. Analysts are expecting to see a 50.4 reading in this month’s release, meaning that sentiment slipped a little during May. A smaller reading will be good news for the bond market and mortgage shoppers while a larger than expected increase could contribute to higher mortgage rates Wednesday.

Wednesday’s other relevant report is the Federal Reserve’s Beige Book, which is named simply after the color of its cover. This report details economic conditions throughout the U.S. by Federal Reserve region. It is relied upon heavily by the Fed to determine monetary policy during their FOMC meetings. If it shows surprisingly softer economic activity since the last report, the bond market may thrive and mortgage rates could drop shortly after the 2:00 PM ET release. If it reveals signs of inflation growing or rapidly expanding economic activity in many regions, we could see mortgage rates revise higher Wednesday afternoon.

Thursday doesn’t have any monthly or quarterly reports to worry about, but Friday has two scheduled including one of the biggest reports we regularly see. That will come from the Labor Department, who will post May’s Employment data early Friday morning. It will give us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see the unemployment rate fall to 4.9% in May from 5.0% in April with approximately 157,000 jobs added to the economy during the month. A higher than expected unemployment rate and a much smaller number than 157,000 would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates Friday. However, stronger than expected numbers should cause a stock rally and a spike in mortgage rates.

The final release of the week will come from the Commerce Department at 10:00 AM Friday. They will post April’s Factory Orders report that is similar to last week’s Durable Goods Orders release, but also includes orders for non-durable goods. It can cause some movement in the financial markets if it varies from forecasts by a wide margin, but it isn’t expected to cause much of a change in rates this month because it follows the almighty Employment report. Current forecasts are calling for a 1.6% jump in new orders from March’s level.

Overall, it appears that Friday is the key day of the week with regards to mortgage rate movement. However, Wednesday could also be a pretty active day for mortgage pricing also. Thursday will probably be the lightest day unless something totally unexpected happens with stocks. We have some key data being posted this week. Therefore, it would be prudent to continue to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.

Lake Tahoe Mortgage Rate Trends- May 27, 2016

Friday’s bond market has opened down slightly as the markets prepare for a long weekend. The major stock indexes are showing minor gains of 31 points in the Dow and 23 points in the Nasdaq. The bond market is currently down 3/32 (1.83%), but we may still see a slight improvement in this morning’s mortgage rates is comparing to Thursday’s pricing due to strength in bonds late yesterday.

Yesterday’s 7-year Treasury Note auction went pretty well but not as good as Wednesday’s 5-year Note sale. We did see bonds improve during afternoon trading yesterday, but I don’t believe that this was a result of the auction. The move was enough for some lenders to revise rates lower intraday, so whether or not you see a slight improvement in rates this morning depends if your lender made that move yesterday afternoon or opted to wait for today’s open to reflect it.

The first of this morning’s two pieces of economic data was the revised 1st quarter GDP reading at 8:30 AM ET. It showed that the economy grew at an annual rate of 0.8% during the first three months of the year. This was an upward revision from the previous estimate of 0.5% but slightly softer than the 0.9% that was expected. The higher rate of economic growth is technically bad news for bonds. However, since the increase came as no surprise and was actually a little lighter than forecasts, we can consider this data neutral towards mortgage rates.

The final report of the week came from the University of Michigan just before 10:00 AM ET when they posted their revised Index of Consumer Sentiment for May. It came in at 94.7, falling a little short of expectations and declining from the preliminary reading of 95.8. This indicates that surveyed consumers were slightly less optimistic about their own financial situations than they were at the last survey. That makes the data good news for bonds and mortgage rates because waning confidence usually translates into weaker levels of consumer spending that limits overall economic growth.

Fed Chair Janet Yellen does speak today when she receives an award at Harvard University, but I don’t believe she will say anything that will move the markets. This is scheduled to take place at 1:15 PM ET, so any reaction will come around then. It is also worth noting that the bond market will close at 2:00 PM ET today ahead of Monday’s Memorial Day holiday. The stock markets will be open a full day today but closed Monday with all markets reopening Tuesday for regular trading hours.

Next week brings us the release of a handful or economic reports, but a couple of them are highly influential to mortgage rates. Tuesday does have data, but not one of these key reports. Look for details on next week’s calendar in Sunday evening’s weekly preview.

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.