Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- September 28, 2015

Monday’s bond market has opened in positive territory following early weakness in stocks. The major stock indexes are starting the week with sizable losses of 165 points in the Dow and 73 points in the Nasdaq. The bond market is currently up 12/32 (2.12%), which should improve this morning’s mortgage rates by approximately .125 of a discount point.

August’s Personal Income and Outlays report was posted at 8:30 AM ET today. It revealed a 0.3% increase in income and a 0.4% rise in spending. Analysts were expecting to see income rose 0.4% and a 0.3% increase in spending. This means that consumer ability to spend was softer than predicted but actual spending was stronger. These are mixed readings of economic strength, so we can consider the data neutral toward mortgage rates.

Tomorrow’s only data is September’s Consumer Confidence Index (CCI) at 10:00 AM ET. This Conference Board index gives us a measurement of consumer willingness to spend. It is expected to show a good-sized decline in confidence from last month’s reading, indicating that consumers were less optimistic about their own financial situations than last month. This means they are less likely to make a large purchase in the near future. That is favorable news for the bond market and mortgage rates because consumer spending fuels economic growth. Analysts are calling for a reading of approximately 96.0, down from August’s 101.5 reading. The smaller the reading, the better the news for the bond market and mortgage rates.

Overall, I believe we will see a fair amount of volatility in the markets and mortgage rates this week, but the busiest days will probably be the latter part of the week. Labeling Thursday and Friday as the most important days is easy due to the significance of the economic reports scheduled those days. The calmest day for mortgage rates may be tomorrow but major moves in the stock markets could lead to movement in rates any day. With such important data and a relatively full calendar, it would be prudent to maintain fairly constant contact with your mortgage professional this week if still floating an interest rate.