Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:
Thursday’s bond market has opened in positive territory even though this morning’s economic data was relatively uneventful. The stock markets are showing fairly sizable gains also with the Dow up 122 points and the Nasdaq up 28 points. The bond market is currently up 9/32, which should equate to an improvement of approximately .375 – .500 of a discount point over yesterday’s morning pricing, partly due to strength in bonds late Wednesday afternoon.
The improvement in bonds and mortgage rates the last two days is encouraging, however, it is too soon to expect a downward trend in rates. There seems to be a pretty strong level of support at 2.50% on the benchmark 10-year Treasury note (currently 2.51%). Until we can fall below that level, it is advised to remain cautious towards mortgage rates if still floating.
The Labor Department gave us last week’s unemployment numbers early this morning, announcing that 346,000 new claims for unemployment benefits were files last week. This was a decline from the previous week but was very close to forecasts of 345,000 and indicates that the employment sector strengthened slightly last week. Therefore, we should consider the data to be neutral for the bond and mortgage markets.
Also released early this morning was May’s Personal Income and Outlays data that showed income rose 0.5% last month and that spending rose 0.3%. These were mixed readings because the increase in income was stronger than expected (0.2%) and the spending reading fell short of the 0.4% that was forecasted. This means that consumers had more money to spend but actually spent less than many had thought. So, we can consider the data neutral to slightly negative simply because the variance on the income reading was wider than the spending.
Later today we will get the results of today’s 7-year Treasury Note auction. Yesterday’s 5-year Note sale didn’t go very well with several indicators that we use to measure investor demand showing lackluster interest. With 5-year and 7-year Notes so close in term, we shouldn’t have high expectations that today’s sale will go any differently than yesterday’s auction did. Generally speaking, strong interest from investors is good news for the bond market and mortgage rates. Results will be posted at 1:00 PM ET today, so any reaction will come during early afternoon trading.
Tomorrow has one report scheduled that is relevant to mortgage rates. It is considered to be moderately important to the broader markets, but can lead to a change in rates if it shows much of a surprise. The University of Michigan will update their Index of Consumer Sentiment for May just before 10:00 AM et tomorrow. This index gives us a measurement of consumer willingness to spend. If consumers are more comfortable with their own financial and employment situations, they are more apt to make large purchases in the near future. Since consumer spending makes up over two-thirds of the U.S. economy, any related data has the potential to affect bond trading and mortgage rates. A downward revision would be considered good news for bonds and rates, but forecasts are calling for little change from this month’s preliminary reading of 82.7.