Financing Homes in Lake Tahoe and Truckee since 1992.

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-Morning Update June 7, 2013

Lake Tahoe Home Loan Rates and Lake Tahoe Mortgage Rates:

Friday’s bond market has opened in negative territory following the release of this morning’s big economic news. The stock markets are showing strong gains as a result of the data, pushing the Dow higher by 166 points and the Nasdaq 26 points. The bond market is currently down 15/32, which should mean this morning’s mortgage rates will be higher by approximately .125 – .250 of a discount point.

The Labor Department gave us this morning’s big news with the release of May’s Employment report. It revealed that the U.S. unemployment rate rose 0.1% to 7.6% last month and that 175,000 new jobs were added. Analysts were expecting to see 7.5% and 160,000 new payrolls. The increase in the unemployment rate is good news for the bond market and mortgage rates because rising unemployment is sector weakness. The new payroll number was a bit higher than we expected, but the majority of analysts’ predictions ranged from 150,000 to 170,000. In other words, the actual number was just a little above the upper range of predictions.

Still, we should consider the data slightly negative for the bond market and mortgage pricing because payrolls did exceed forecasts and they draw more attention these days than the unemployment number does. The slight move in the unemployment rate from 7.5% to 7.6% was not enough to offset the news of 175,000 new jobs. It is worth noting though that today’s report also revised April and March’s job numbers lower by 12,000 and the 175,000 jobs is not enough to get the unemployment rate down to a comfortable level any time soon. They also should quiet the recent talk of the Fed reducing their bond buying program at the next FOMC meeting June 18-19. Unfortunately though, it appears the bond market was really expecting to see disappointing numbers. Today’s was a good opportunity for the bond and mortgage markets to make up more of their recent losses, but it looks like that will not be the case.

Next week has only a couple of economic reports scheduled for release, but a majority of what is coming is considered to be of high importance. We will get key measurements of consumer spending and inflationary pressures at the manufacturing level of the economy. In addition to the economic reports, there are also a couple of Treasury auctions that are likely to influence bond trading and mortgage rates. However, all of the relevant events will take place the middle and latter days of the week. Look for details on next week’s agenda in Sunday’s weekly preview.