Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rate Trends- September 29, 2015

Tuesday’s bond market has opened in positive territory despite stronger than expected economic data. The stock markets are showing relatively minor gains with the Dow up 35 points and the Nasdaq up 19 points. The bond market is currently up 4/32 (2.08%), which should improve this morning’s mortgage rates by a little more than .125 of a discount point over Monday’s early pricing.

We saw bonds improve late yesterday as stocks losses got larger. The Dow closed the day down 312 points while the Nasdaq lost 142 points. When stocks are in selling mode, bonds usually become more appealing to investors to escape the volatility. This is known as flight-to-safety. The end result was a small improvement in mortgage rates by many lenders. If your lender revised pricing lower yesterday afternoon, you likely will see a smaller improvement this morning.

September’s Consumer Confidence Index (CCI) was released at 10:00 AM ET this morning. It showed a reading of 103.0 that greatly exceeded forecasts of 96.0. Analysts were expecting to see a decline from August’s revised 101.3 reading. This means that surveyed consumers felt much better about their own financial and employment situations than many had thought. Because rising confidence usually translates into stronger levels of consumer spending that fuels economic growth, we should consider this data negative for bonds and mortgage rates.

Tomorrow’s only relevant release is the ADP Employment report for September at 8:15 AM ET. It has the potential to cause movement in the markets if it shows much stronger or weaker numbers than expected. 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 follows a couple days later. Still, because we have recently seen reaction to the report, we will be watching it. Analysts are expecting it to show that 200,000 new payrolls were added. The lower the number of jobs, the better the news it is for mortgage rates.