Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- March 30, 2015

Monday’s bond market has opened in positive territory despite huge gains in stocks. The major stock indexes are in rally mode early this morning with the Dow up 267 points and the Nasdaq up 38 points. The bond market is currently up 4/32 (1.94%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

February’s Personal Income & Outlays report kicked off this week’s calendar early this morning. It showed that personal income rose 0.4% and that spending rose 0.1% from January’s levels. The income reading exceeded forecasts slightly but the spending fell short by the same 0.1% margin. Rising income is bad news for bonds because it means consumers have more money to spend. However, the softer than expected spending reading indicates that despite the rise in income, consumers spent less than many had thought. The two readings more or less negate each other in terms of impact on this morning’s mortgage rates.

Tomorrow’s only relevant report is March’s Consumer Confidence Index (CCI) from the New York-based Conference Board at 10:00 AM ET. This index gives us an indication of consumers’ willingness to spend. Bond traders watch this data closely because consumer spending makes up over two-thirds of our economy. If this report shows that confidence in their own financial situations is falling, it would indicate that consumers are less apt to make a large purchase in the near future. If it reveals that confidence looks to be growing, we may see bond traders sell as economic growth may rise. That would likely lead to slightly higher mortgage rates tomorrow morning. It is expected to show a reading of 96.2 down slightly from February’s 96.4 reading. The lower the reading, the better the news it is for bonds and mortgage pricing.

Overall, Friday is the biggest day of the week due to the significance of the monthly Employment report but I suspect we will have an active day in mortgage rates Wednesday also with the ISM index being posted. Adding to the importance of Friday’s data is the fact that the bond market will be open only until noon in recognition of the Good Friday holiday while the stock markets will be closed the entire day. It surely will be an interesting day to cap off the week. I strongly recommend maintaining contact with your mortgage professional this week if still floating an interest rate and closing in the near future.