Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends-July 24, 2014

Thursday’s bond market has opened well in negative territory even though stocks are flat. Stocks are in positive ground during early trading but not by much. The Dow is currently up 14 points while the Nasdaq has gained 4 points. The bond market is currently down 13/32 (2.51%), which with yesterday’s afternoon weakness should push this morning’s mortgage rates higher by approximately .250 – .375 of a discount point if comparing to Wednesday’s morning pricing.

The first of this morning’s two pieces of economic data was last week’s unemployment numbers at 8:30 AM ET. They revealed some surprising results with only 284,000 new claims for unemployment benefits filed last week. This was well below the previous week’s revised 303,000 initial claims and the 308,000 that was expected. It also was the lowest number since February 2006, indicating that the employment sector was stronger last week than many had thought. This data usually doesn’t have much of an impact on rates because it is only a weekly snapshot, but this was enough of a variance to help push this morning’s mortgage rates higher.

June’s New Home Sales report was posted at 10:00 AM ET, also showing some surprising results. The Commerce Department announced that sales of newly constructed homes fell 8.1% from May’s revised total. This was a larger monthly decline than was expected, making the data positive for bonds and mortgage rates. Even more newsworthy was a sizable downward revision to May’s sales with no explanation. This means that the new home portion of the housing sector was actually pretty weak in May and did not rebound last month.

Tomorrow morning brings us the release June’s Durable Goods Orders at 8:30 AM ET. Current forecasts are calling for an increase in new orders of 0.3% from May to June. This data gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket items, or products that are expected to last three or more years. A much stronger than expected number may lead to higher mortgage rates because it would point towards economic strength. If it reveals a large decline in new orders, mortgage rates should move lower. It should be noted though that this data is known to be extremely volatile from month to month, so a minor difference between forecasts and the actual reading may not affect the markets or mortgage rates.