Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- March 29, 2016

Tuesday’s bond market has opened in positive territory even though this morning’s only relevant economic data gave us stronger than expected results. The stock markets are mixed with the Dow down 32 points and the Nasdaq up 8 points. The bond market is currently up 7/32 (1.85%), but due to another round of afternoon weakness we will likely see little change in this morning’s mortgage rates if comparing to Monday’s early pricing. Today’s early bond strength should erase the upward revision from yesterday afternoon.

Today’s sole piece of relevant data was March’s Consumer Confidence Index (CCI) at 10:00 AM ET. The Conference Board announced a reading of 96.2, exceeding forecasts of 94.5 and February’s revised reading of 94.0. This means surveyed consumers were more optimistic about their own financial and employment situations than many had thought. Because rising confidence usually translates into stronger levels of consumer spending, we should consider this data negative for mortgage rates. Fortunately though, bond traders don’t seem to be too concerned about the data this morning.

We also have the first of this week’s two Treasury auctions today that may also influence bond trading enough to affect mortgage rates. 5-year Notes are being sold today, followed by 7-year Notes tomorrow. Neither of these sales will directly impact mortgage pricing, but they can influence general bond market sentiment. If the sales go poorly, we could see broader selling in the bond market that leads to upward revisions to mortgage rates. However, strong sales usually make bonds more attractive to investors and bring more funds into the bond market. The buying of bonds that follows often translates into lower mortgage rates. Results of today’s auction will be posted at 1:00 PM ET, so any reaction will come during early afternoon trading.

The ADP Employment report is set for release early tomorrow morning, which has the potential to cause some movement in the markets if it shows much stronger or weaker numbers. This report tracks changes in private-sector jobs of ADP’s clients that use them for payroll processing. While it does draw attention, it is my opinion that it is overrated and is not a true reflection of the broader employment picture. It also is not accurate in predicting results of the monthly government report that usually follows a couple days later. Still, because we could see at least a moderate reaction to the results, we will be watching it. Analysts are expecting it to show that 196,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.