Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- August 5, 2015

Wednesday’s bond market has opened in well in negative territory, extending yesterday’s late sell-off. Stocks are showing decent sized gains with the Dow up 94 points and the Nasdaq up 58 points. The bond market is currently down 17/32 (2.28%), which with yesterday’s afternoon selling should push this morning’s mortgage rates higher by approximately .500 of a discount point if comparing to Tuesday’s morning pricing.

The bond market turned south around 1:30 PM ET yesterday and spiraled downward until closing. As bond prices fall, yields move higher. Since mortgage rates track bond yields, we saw many lenders revise rates upward during afternoon trading yesterday with some posting two adjustments. Just how much of an increase you will see in today’s rates depends on the size of the revision your lender made intra-day yesterday. Overall, there should be a difference of approximately .500 of a discount point or .125 of a percent in rate from yesterday’s morning rates.

Today’s only important data was July’s ADP Employment report at 8:15 AM ET. It showed an increase of 185,000 private-sector jobs that fell well short of the 220,000 that was expected. Therefore, the data should be considered good news for the bond market and mortgage shoppers because it indicates the private-sector portion of the employment sector was not as strong as many had thought. Unfortunately, the sudden broad negative momentum in bonds is too strong to allow this news to influence trading this morning.

Tomorrow’s only data will be last week’s unemployment figures. They are expected to show that 271,000 new claims for unemployment benefits were filed last week, up from the previous week’s total of 267,000. Declining initial claims is a sign of employment sector strength, so the larger the number, the better the news it is for mortgage rates. Although, because this is only a weekly reading, the markets usually need a significant variance from forecasts for them to have a noticeable impact.