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Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-Morning Update-July 24, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Wednesday’s bond market has opened well in negative territory as it appears the 10-year Treasury Note is unable to stay under 2.50% (currently 2.57%). The stock markets are mixed again with the Dow down 55 points and the Nasdaq up 7 points. The bond market is currently down 18/32, which will likely push this morning’s mortgage rates higher by approximately .375 – .500 of a discount point if comparing to yesterday’s morning pricing.

The Commerce Department gave us this morning’s only U.S. economic report with the release of June’s New Home Sales data. They said late this morning that sales of newly constructed homes rose 8.3% last month, reaching their highest level in 5 years. That is a much larger increase than analysts were expecting to see, but part of the difference comes from a downward revision to May’s sales. Still, the report indicates that the new home portion of the housing sector was stronger than many had thought, making the data negative for the bond market and mortgage rates. Although, it is worth noting that the data hasn’t had much of an influence on this morning’s bond trading as bonds were showing losses well before the economic news was posted.

We also have today’s 5-year Treasury Note auction to watch for this afternoon. Results will be posted at 1:00 PM ET, so any reaction in the bond and mortgage markets will come during early afternoon trading. If the sale went well or had a high level of investor demand, we should see bond prices improve during afternoon hours. However, this sale is not important enough to erase this morning’s losses by itself. We could see a small move from where rates are shortly before the results are posted. And the same goes if we hear of a weak demand in the auction. It could lead to an upward revision in rates later today, but the auction itself likely won’t be the sole cause if the increase is noticeable. We then get to do the same tomorrow with the 7-year Note auction.

The Commerce Department will post June’s Durable Goods Orders at 8:30 AM ET tomorrow just as the Labor Department releases their weekly unemployment update. Current forecasts are currently calling for an increase in Durable Goods orders of 1.8% from May to June. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years such as appliances and electronics. A much stronger than expected number may lead to higher mortgage rates tomorrow morning because it would point towards economic strength. If it reveals a large decline in new orders, mortgage rates should improve. It should be noted though that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not move the markets or mortgage rates.

The Labor Department is expected to announce that 340,000 new claims for unemployment benefits were filed last week. This would be an increase from the previous week’s 334,000 initial claims, indicating the employment sector weakened last week. The higher the number of new claims for benefits, the better the news it is for the bond market and mortgage rates. Since this report tracks only a single week’s worth of new claims, its’ impact on the bond market and mortgage pricing is usually fairly minimal unless it shows a significant variance from forecasts.