Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- May 2, 2016

Monday’s bond market has opened in negative territory following mixed results in this morning’s important economic report. The stock markets are starting the week with moderate gains of 65 points in the Dow and 7 points in the Nasdaq. The bond market is currently down 5/32 (1.85%), but due to strength late Friday we should see little change in this morning’s mortgage rates.

The Institute for Supply Management (ISM) opened the week’s calendar of events late this morning with the release of their April manufacturing index. It came in at 50.8, falling short of the 51.4 that was expected and down from March’s 51.8. This means fewer surveyed manufacturers felt business improved last month than did in March. That is good news for the bond and mortgage markets because it points to a softening manufacturing sector. However, a secondary reading that tracks prices paid rose much higher than expected, to its highest level since September 2014. The jump raises concern about inflationary pressures that make bonds less attractive to investors. Therefore, we are seeing a negative reaction to the news instead of a positive move.

The rest of the week brings us the release of four more pieces of economic data that are likely to influence mortgage rates including the almighty monthly Employment report. There is nothing of importance scheduled for tomorrow, so look for stocks to influence bond trading and possibly mortgage pricing. Wednesday has three of the four releases, so it may be a pretty active day for the markets.

Overall, Friday is the single most important day of the week due to the significance of the monthly Employment report. Tomorrow is the best candidate for lightest day because traders will probably be making adjustments Thursday before Friday’s key economic release. Due to the significance of some of this week’s data, I highly recommend maintaining contact with your mortgage professional this week if still floating an interest rate.