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Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – January 31, 2014

Lake Tahoe Home Loans, Lake Tahoe Home Loan Rates, Lake Tahoe Mortgage Loans, Lake Tahoe Mortgage Loan Rates, and Lake Tahoe Mortgage Rates:

Friday’s bond market has opened in positive territory due mostly to fairly significant stock selling during early trading. The Dow is currently down almost 200 points while the Nasdaq has fallen 40 points. The bond market is currently up 10/32, which with yesterday’s afternoon gains should improve this morning’s mortgage rates by approximately .250 of a discount point if comparing to Thursday’s morning pricing.

We saw mortgage bonds improve late yesterday, partly as a result of fairly strong 7-year Treasury Note auction. The 5-year Note sale that concluded at 11:30 AM yesterday did not go as well as the 7-year auction did. Bonds worsened right after the 5-year sale results were released but improved after the 1:00 PM announcement on the 7-year auction and closed near their best levels of the day. That caused some lenders to improve rates by approximately .125 of a discount point yesterday afternoon while some may have waited until this morning’s data to reflect that move.

December’s Personal Income and Outlays data at 8:30 AM ET was the first of three reports released this morning. The Commerce Department announced that personal income was unchanged from November to December and personal spending rose 0.4% in that period. Both readings were expected to show a 0.2% increase. This means that income, which gives consumers the ability to spend, was weaker than forecasts but consumers actually spent more than thought. Those mixed results make the data neutral to slightly negative for the bond market and mortgage rates.

The second release of the day was the 4th Quarter Employment Cost Index (ECI) that showed a 0.5% increase. Analysts were expecting to see only a 0.4% rise in this index that tracks employer costs for employee wages and benefits. The higher reading technically makes it bad news for mortgage rates. However, this is a minor variance in a moderately important report, so its impact on today’s trading has been minimal.

Late this morning, the University of Michigan revised their Index of Consumer Sentiment for January. The release revealed a reading of 81.2 that was an upward revision from the preliminary reading of 80.4. This means surveyed consumers were a little more optimistic about their own financial and employment situations than was thought earlier this month. The increase hints that consumers maybe a little more willing to make a large purchase in the near future than previously predicted. Since consumer spending fuels economic growth, we should consider this data bad news for the bond and mortgage rates, although it also was minor variance in moderately important data. That should limit the impact on today’s mortgage rates.

Next week has fewer economic releases and other events scheduled that may influence mortgage rates, but some of the data is considered highly important to the markets. The week will start Monday with one of those key reports when the Institute for Supply Management (ISM) posts their manufacturing index for January.