Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- February 1, 2016

Monday’s bond market has opened in negative territory despite early stock selling and somewhat favorable economic news. The major stock indexes are showing fairly sizable losses with the Dow down 112 points and the Nasdaq down 32 points. The bond market is currently down 7/32 (1.94%), which should push this morning’s mortgage rates higher than Friday’s early pricing by approximately .125 of a discount point.

December’s Personal Income and Outlays data kicked off this week’s calendar at 8:30 AM ET today. It showed that personal income rose 0.3% in December while spending levels were unchanged. Analysts were expecting to see a 0.2% increase in both readings. The stronger income number means consumers had more to spend than thought, making it unfavorable for mortgage rates. However, offsetting that news and then some is the fact that they spent less than expected.

At 10:00 AM ET, the Institute of Supply Management (ISM) posted their manufacturing index for January. It came in at 48.2, just under the 48.3 that was expected. A downward revision to December’s reading (48.2 to 48.0) means we saw a slight increase in manufacturer sentiment about business conditions. Still, the 48.2 reading indicates that more surveyed executives felt business worsened in the month than those who felt it had improved. That indicates sector weakness and makes report good news for the bond and mortgage markets.

We have four more monthly and quarterly economic reports scheduled the rest of the week that are likely to influence mortgage rates. There is nothing of importance scheduled for tomorrow, so unless stocks stage a major rally or sell-off, we can expect to see a relatively calm day for mortgage rates.

Overall, Friday is easily the best candidate for most important day of the week although today’s data was considered highly important also. The calmest day will probably be tomorrow unless something unexpected happens. I am fully expecting to see another very active week for mortgage rates, so please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.