Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- July 27, 2015

Monday’s bond market has opened in positive territory despite stronger than expected economic news. The stock markets are starting the week with sizable losses of 99 points in the Dow and 24 points in the Nasdaq. The bond market is currently up 8/32 (2.23%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

June’s Durable Goods Orders report was posted early this morning by the Commerce Department. They announced a 3.4% increase in new orders for big-ticket items that was a little stronger than the 3.0% increase that was predicted. A secondary reading that excludes more pricey and volatile transportation-related orders such as airplanes showed similar results (+0.8% vs +0.5% forecast). This data indicates that the manufacturing sector was a little stronger than thought last month, making the data slightly negative for bonds and mortgage rates. However, this data is known to be quite volatile, so the variances in this morning’s report were not considered significant and helped to minimize its impact on today’s rates.

The rest of the week brings us the release of four more economic reports that may impact mortgage rates, one of which is considered to be highly influential. In addition to the economic data, there is also another FOMC meeting that certainly has the potential to cause chaos in the markets and a couple of Treasury auctions mid-week. With data or relevant events scheduled every day, there is a strong likelihood of seeing noticeable mortgage rate movement and possible intra-day revisions more than once this week.

Tomorrow’s sole data is July’s Consumer Confidence Index (CCI) from the Conference Board. This index measures consumer sentiment, giving us an idea of consumer willingness to spend. If consumers are more confident in their own financial and employment situations, they are apt to make large purchases in the near future. This is important because consumer spending makes up such a large portion of our economy. If the CCI reading is weaker than expected, meaning that consumers were less confident than thought and likely will delay making a large personal purchase, we may see bond prices rise and mortgage rates drop tomorrow morning. Current forecasts are calling for a reading of 100.0 which would be a weaker reading than June’s 101.4 and indicate consumers are a little less comfortable with their finances than they were last month.

Overall, Wednesday is the most important day of the week due to the FOMC meeting results, but Thursday’s GDP posting is highly important to the markets. I suspect we will see a more active week for mortgage rates than we saw last week, so please maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.