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Monday’s bond market has opened flat with nothing of importance scheduled for release today and no significant news from over the weekend. The stock markets are starting the week mixed with the Dow lower by 43 points and the Nasdaq up 3 points. The bond market is currently almost unchanged from Friday’s close (2.79%), but due to some weakness late Friday we may see a slight increase in this morning’s mortgage rates.
Today is one of this week’s two days that does not have anything scheduled that is relevant to mortgage rates. The week brings us the release of only three relevant economic reports along with two Treasury auctions for the markets to digest. Two of the three reports are considered highly important, so we could see a fair amount of movement in rates again the latter part of the week.
The first thing on the calendar will come Wednesday afternoon while the first economic data is set for release Thursday. There are two Treasury auctions this week that could potentially affect mortgage rates. The first is the 10-year Treasury Note auction Wednesday and the 30-year bond sale will be held Thursday. Results of both sales will be posted at 1:00 PM ET on the sale days. If investor demand was high, we may see bonds rally during afternoon trading as it would hint that investors still have an appetite for longer-term securities. However, weak demand in the sales could lead to selling and an increase in mortgage rates late Wednesday and/or Thursday.
Overall, I believe Thursday will be the most important day of the week, but Friday is also likely to be active for mortgage rates. Stocks rallied last week, helping to drive bond yields and mortgage rates higher. The yield on the benchmark 10-year Treasury Note closed the week at 2.79%. This is troublesome for mortgage borrowers because rates tend to follow bond yields. This week will tell us a lot about which direction bond yields and mortgage pricing will be headed in the near future.