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Lake Tahoe Home Loans and Lake Tahoe Mortgage Loan Rates – Morning Update – September 30, 2013

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

Monday’s bond market has opened in positive territory, but not nearly as well as expected. The stock markets are reacting to the weekend news as they should, with sizable losses. The Dow is currently down 138 points while the Nasdaq has lost 28 points. The bond market is currently up 2/32, which should improve this morning’s mortgage rates slightly if comparing to Friday’s morning levels.

Today has no relevant economic data scheduled for release, leaving the markets to the mercy of news of any progress (or lack of) out of Washington D.C. regarding the likely government shutdown this evening. The rest of the week has three monthly or quarterly economic reports set for release, including two very important releases. However, the government shutdown threatens the release of two of them since the agencies that compile the data and post the reports will be shuttered.

At this time, it appears that a deal to avoid a shutdown is not going to happen. This means that many government operations will come to a halt at midnight ET this evening. While that is a problem outside the mortgage world, it also should be noted that there are some specific problems to mortgage shoppers. As of tomorrow, most government mortgage loans (FHA/USDA) would come to a standstill but VA loans should not be affected unless the shutdown turns into an extended period. All conventional loans should proceed without issue. And it is my understanding that the National Flood Insurance Program will not be affected by a temporary shutdown either.

Tomorrow brings us the release of the Institute for Supply Management’s (ISM) manufacturing index for September at 10:00 AM ET. The ISM is not a governmental agency, so the shutdown will not impact this release. The index measures manufacturer sentiment and it can be highly influential on the markets and mortgage rates. Analysts are expecting to see a small decline from August’s 55.7 reading, meaning surveyed manufacturers felt business conditions worsened from the previous month. The 50.0 benchmark is extremely important since a reading below that level means more surveyed executives felt business worsened in the month than those who said it had improved. This data is important not only because it measures manufacturer sentiment, but it is also very recent data. Some economic releases track data that is 30-60 days old, but the ISM index is only a few weeks old. Actually, it is the first report that we see each month. If it reveals a reading below 55.0, meaning senti! ment fell short of expectations, we should by theory see the bond market move higher and mortgage rates fall tomorrow.

Overall, I am still expecting to see a good amount of volatility in the markets and mortgage rates this week despite the calm open in the bond market today. Based on an economic calendar, tomorrow and Friday are the key days but the impasse in Washington puts into question whether we will even see the data later in the week let alone if it will be the biggest influence on this week’s trading. Tomorrow will be a key day with the ISM index, regardless of the outcome in Washington. The rest of the week’s data is in limbo, so it is difficult to make a prediction beyond that point.