Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- July 31, 2015

Friday’s bond market has opened in positive territory following weaker than expected economic news. The major stock indexes are mixed with the Dow down 10 points and the Nasdaq up 15 points. The bond market is currently up 16/32 (2.28%), which should improve this morning’s mortgage rates by approximately .250 – .375 of a discount point.

Neither of this morning’s two relevant economic releases were considered to be highly important, but both gave us favorable results and have helped to boost bond prices during early trading. At 8:30 AM ET, the 2nd Quarter Employment Cost Index (ECI) was released, showing a 0.2% rise compared to forecasts of a 0.6% increase. This means employer costs for wages and benefits rose much less than many had thought during the April to June quarter. Because rising wages and wage inflation can spread to other parts of the economy, it is looked upon negatively in the bond market. The softer reading makes the data good news for bonds and mortgage rates.

July’s University of Michigan Index of Consumer Sentiment was posted just before 10:00 AM ET. It came in at 93.1, falling short of the 94.0 that was expected. This was also a slight decline from the initial reading of 93.3 that was announced two weeks ago, indicating that consumer confidence in their own financial situations dipped or remained flat instead of improving like analysts were expecting. Since rising confidence usually means consumers are willing to spend more, we can consider this data slightly favorable for mortgage rates.

Next week is pretty busy with important monthly data being released four of five days. Two reports are considered highly important to the markets, including the almighty monthly Employment report next Friday. There are two releases set for Monday, one of which is the week’s other key report (July’s ISM index). Look for an active Monday to start the week with the Personal Income and Outlays report and ISM index both coming during morning hours. We will address these reports and the rest of the week’s activities in Sunday evening’s weekly preview.