Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- May 5, 2015

Tuesday’s bond market initially opened in positive territory but has since fallen into negative ground, extending yesterday’s afternoon selling. Stocks are also in negative territory with the Dow down 23 points and the Nasdaq down 39 points. The bond market is currently down 9/32 (2.17%), which with yesterday’s late weakness should push this morning’s mortgage rates higher by approximately .250 of a discount point if comparing to Monday’s early pricing.

There is nothing significant scheduled for today that is likely to affect mortgage rates. Unfortunately, this does not mean that we can expect to see rates remain flat. We have seen afternoon volatility the last couple of trading days and there is no reason to believe that it will not happen today also. Therefore, keep an eye on the markets if floating a rate and closing in the near future.

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 do often see a reaction to the report, we should be watching it. Analysts are expecting it to show that 189,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.

The second report of the day will come from the Labor Department, who will release its 1st Quarter Productivity and Costs data during early morning hours. This information helps us measure employee productivity in the workplace. High levels of productivity help allow low-inflationary economic growth. If employee productivity is rapidly rising, the bond market should react favorably. However, a sizable decline could cause bond prices to drop and mortgage rates to rise slightly tomorrow morning. It is expected to show a 1.9% drop in worker productivity during the first three months of the year.