Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates-Morning Update-Juy 8, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:
Monday’s bond market has opened well in positive territory, although well short of erasing Friday’s sell-off. The stock markets are starting the week in positive ground also with the Dow up 114 points and the Nasdaq up 12 points. The bond market is currently up 17/32 however, we will still see a noticeable increase in this morning’s mortgage rates if comparing to Friday’s morning pricing. Late selling Friday extended the morning’s bond losses significantly and caused most lenders to revise their pricing higher during afternoon trading, many of which revised more than once. Today’s early gains have helped to recover a good portion of those losses from late Friday, but we will still likely see an increase in pricing if comparing to Friday’s early rates.

There is nothing of significance scheduled for today or tomorrow. The rest of the week brings us the release of two relevant economic reports for the bond market to digest in addition to the minutes from the last FOMC meeting and two fairly important Treasury auctions. Only one of the economic reports is considered to be of high importance and everything on the week’s calendar will come during the middle and latter days of the week. This means we are likely to see the most volatility in mortgage pricing between Wednesday afternoon and Friday morning.

There are also some heavily watched corporate earnings releases scheduled for the stock markets this week that can influence bond trading and therefore, mortgage pricing several days. They start this afternoon with the release of Alcoa’s earnings after the market closes. This company isn’t necessarily important to gauging economic strength, but it is the first Dow component company that posts earnings each quarter. Since it is the first look into Dow-related earnings, it draws plenty of attention in the markets. Generally speaking, weaker corporate earnings reports translates into stock selling that should make bonds more attractive to investors. As bond prices rise, yields fall and mortgage rates usually follow bond yields.

The events we will be watching this week start Wednesday with the first of two important Treasury auctions (10-year Notes) and the minutes from the most recent FOMC meeting. Both are afternoon events at 1:00 PM and 2:00 PM ET respectively, so any reaction in mortgage rates will come during afternoon hours. There are also two monthly reports scheduled for Friday morning (Producer Price Index and University of Michigan Consumer Sentiment index) that are likely to affect bond trading and mortgage rates.

Overall, it is difficult to try to label one particular day as the most important this week. Tomorrow could be the least important with no economic events scheduled. As mentioned a couple times recently, I would be extremely cautious floating an interest rate until the yield on the benchmark 10-year Treasury Note nears 3.00%. Today’s gains have lowered it to 2.67% from Friday’s 2.71%, but there is still room for further selling in bonds that will continue to pressure mortgage rates. The single most important day for the bond market is either Wednesday due to the 10-year Note auction and the release of the FOMC minutes or Friday morning when the two most important economic reports of the week will be posted