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Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates-Morning Update-July 9, 2013

Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:

Tuesday’s bond market has opened in positive territory again, extending yesterday’s afternoon strength. The stock markets are showing minor gains with the Dow up 42 points and the Nasdaq up 6 points. The bond market is currently up 4/32, which with yesterday’s late strength should improve this morning’s mortgage rates by approximately .375 of a discount point from Monday’s morning pricing.

There is nothing of importance on the calendar for today or tomorrow morning, but tomorrow afternoon gets much more active. The first of this week’s two important Treasury auctions will take place tomorrow when 10-year Notes will be sold. That sale will be followed by a 30-year Bond auction Thursday. These sales can influence market trading in bonds and possibly affect mortgage rates. If the sales are met with a strong demand from investors, particularly tomorrow’s sale because the 10-year Note is the benchmark bond market security, we should see afternoon improvements in bonds that could lead to downward revisions to mortgage rates. However, if buyers stay on the sidelines, we may see bonds fall after results are posted at 1:00 PM ET and mortgage rates move higher those days.

Late last week it was hard to believe we would see strong auction results in this week’s sales. However, a nice rally in bonds yesterday and strength this morning may be a sign that there are more believers in the theory that the recent bond sell-off was an overreaction. In addition, the 10-year Note is currently yielding 2.62%, which may help draw some interest as it is .40% higher than where it was at the last auction of this security and almost .875% higher than May’s auction. It will be interesting to see if the higher yield will attract more investors, although rising stock prices do allow quicker profits for long-term buyers.

Also tomorrow is the afternoon release of the minutes from the last FOMC meeting. There is a good possibility of the markets reacting to them following their 2:00 PM ET release. I find it hard to believe that they could reveal anything more surprising than we got after the last FOMC meeting or during Chairman Bernanke’s press conference that followed. Still, market participants will be looking for anything new, particularly about the estimated timeframe when the Fed will begin tapering their current $85 billion a month bond buying program (QE3). The minutes will tell us how members voted for related motions and could cause more volatility in the markets if there is anything unexpected in them.

Fed Chairman Bernanke has a speaking engagement in Boston after the markets close tomorrow. The topic is related to the history of the Fed’s monetary policy and he will be speaking to a group of economists. I don’t see this speech causing much movement in the markets, but anytime the Fed Chairman speaks publicly, his words draw attention. If there is a reaction to his speech, we won’t see it until Thursday’s morning trading.