Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-Morning Update-July 22, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Monday’s bond market has opened relatively flat despite the release of weaker than expected economic data. The stock markets are following suit with a calm open to the week. The Dow is currently up 15 points while the Nasdaq has gained 9 points. The bond market is currently up slightly from Friday’s close, but we should still see an improvement in this morning’s mortgage rates of approximately .125 – .250 of a discount point due partly in bond strength late Friday.

Friday’s afternoon gains and this morning’s opening have the yield of the benchmark 10-year Treasury Note at 2.48%. The fact it closed below 2.50% Friday and appears able to remain below that level today is fairly significant for mortgage rate direction, assuming we do close today at 2.49% or lower. Ideally, we would like to see it move more towards and break below 2.42%, but sub-2.50% is a great start. The farther below 2.50% it goes, it is my opinion the more likelihood that 2.90% is not coming in the immediate future unless something drastic and unexpected happens in the markets. This bodes well for mortgage shoppers as mortgage rates tend to follow bond yields.

Today’s only relevant economic data came from the National Association of Realtors at 10:00 AM ET. They announced that home resales slipped 1.2% last month when analysts were expecting an increase in the neighborhood of 2%. The headline number indicates a softening housing sector that would be good news for the bond and mortgage markets. However, the report showed rising prices that points towards a still growing sector. That bit of news offsets the decline in sales that was favorable to the bond market. Therefore, we should consider the data neutral for the bond market and mortgage pricing.

Tomorrow has nothing of importance scheduled for release that will likely influence mortgage rates, but the remainder of the week has three monthly reports in addition to two Treasury auctions. We are also still in corporate earnings season, so any surprises in those releases could affect stock and bond trading, leading to changes in mortgage rates.

Overall, I am expecting a relatively active week in the financial and mortgage markets. I don’t see a particularly important day that can be labeled as the key day of the week, but that doesn’t mean we won’t see movement in rates multiple days. The most important report of the week is Thursday’s Durable Goods Orders, so we may see the most movement that day if the rest of the reports don’t show any significant surprises and the markets remain calm. Unless corporate earnings or something else fuels a rally or sell-off in stocks that drive bond trading, tomorrow appears to be the best candidate as the least important day of the week.