Lake Tahoe Mortgage Loan Rates and Lake Tahoe Home Loans:
Monday’s bond market has opened in positive territory following another bit of favorable economic news. The stock markets are showing minor gains even though this morning’s economic data showed weaker than expected results. The bond market is currently up 8/32, which should improve this morning’s mortgage rates approximately .250 of a discount point.
July’s Durable Goods Orders was this morning’s sole economic report. The Commerce Department announced early this morning that new orders for big-ticket items fell 7.3% last month when analysts were expecting to see a decline of 4.5%. In addition, the report revealed a decline of 0.6% in a secondary reading that excludes more volatile transportation-related orders such as new airplanes. Since analysts were expecting a 0.5% increase in that reading, we can consider both to be good news for the bond market and mortgage rates because they point towards manufacturing sector weakness.
Today’s economic data has helped extend Friday’s bond rally, improving mortgage rates again. This morning’s gains have pushed the yield on the benchmark 10-year Treasury Note down to 2.80%. That is good news for mortgage shoppers since mortgage rates tend to follow bond yields. I believe this morning’s data further supports my previous predictions that the economic data will not portray the level of economic growth that the Fed envisioned when they started talking about tapering their current bond buying program back in May and June. These are not key economic reports that we have seen over the past couple days, but if they are any indication of what is to come from the major reports that will be released over the next two weeks leading up to the next FOMC meeting, it will be difficult for the Fed to justify tapering at this time. This is why the stock markets have reacted positively to the same weaker economic data that is boosting bonds.
The rest of the week has four more economic reports scheduled for release that are relevant to mortgage rates in addition to two Treasury auctions that can potentially affect rates. There is data being posted each day this week except for Wednesday, but none of the reports are considered to be highly important. Still, most of the week’s releases carry enough significance to affect mortgage rates if their results vary from forecasts, as we have seen this morning.
Tomorrow also has only one report worth watching. The Conference Board will post their Consumer Confidence Index (CCI) for August at 10:00 AM ET tomorrow. This index measures consumer sentiment about their personal financial situations, which helps us measure consumer willingness to spend. If consumers are feeling more confident in their own finances, they are more apt to make a large purchase in the near future, fueling economic growth. A decline in confidence would indicate that surveyed consumers probably will not be buying something big in the immediate future. That would be a sign of economic weakness and should drive bond prices higher, leading to lower mortgage rates again tomorrow. It is expected to show a reading of 77.0, which would be a decline from July’s 80.3. The lower the reading, the better the news for bonds and mortgage rates.
Overall, I am expecting to see the most movement in rates Thursday or Friday, but today’s move was noticeable also. Wednesday looks to be the lightest day with nothing of importance scheduled except the moderately important Treasury auction. Even though none of this week’s economic data is considered to be a market mover, we still should see plenty of activity and movement in rates.