Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- August 12, 2015

Wednesday’s bond market has opened in positive territory again due to another round of stock selling. Stocks are reacting negatively to another currency move by China, pushing the Dow lower by 197 points and the Nasdaq down by 58 points. The bond market is currently up 6/32 (2.12%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

We don’t have anything of importance set for this morning, but we do have an afternoon event that may affect bond trading and mortgage rates. 10-year Treasury Notes are being auctioned today while 30-year Bonds go tomorrow. If demand was strong in today’s sale, particularly from international investors, we should see mortgage rates improve during afternoon trading. However, weak levels of interest could lead to broader selling in the bond market that could push mortgage rates higher. Results of the sale will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

Tomorrow brings us the release of two reports, one of which is much more important than the other. The more influential release is July’s Retail Sales data at 8:30 AM ET tomorrow. This report comes from the Commerce Department and will give us a very important measurement of consumer spending. Consumer level spending figures are extremely relevant to the markets because it makes up over two-thirds of the U.S. economy. Current forecasts are calling for a 0.5% increase in sales. Analysts are also calling for a 0.5% rise in sales if more volatile auto transactions are excluded. Larger than expected increases would be considered bad news for bonds and likely lead to an increase in mortgage pricing since it would indicate stronger economic growth.

The second report of the morning will be last week’s unemployment figures. They are expected to show that 270,000 new claims for benefits were filed, matching the previous week’s total. Ideally, we want to see a large increase in initial claims, indicating employment sector weakness. The higher the number of claims, the better the news it is for mortgage rates. It is worth noting though that this is only a weekly snapshot and the Retail Sales report is considered a major release, so I am not expecting the claims data to have much of an impact on tomorrow’s mortgage pricing.