Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:
Monday’s bond market has opened sharply in negative territory again, continuing last week’s slide. The stock markets are tanking also with the Dow down 234 points and the Nasdaq down 58 points. The bond market is currently down 18/32, pushing the yield on the benchmark 10-year Treasury Note up to 2.61%. This will likely equate to another increase in this morning’s mortgage rates of approximately .500 – .625 of a discount point.
There is nothing of importance scheduled for release today, but the rest of the week brings us six economic reports for the markets to digest in addition to two Treasury auctions that have the potential to influence rates. Unfortunately, even a sizable stock sell-off and weaker than expected economic news is likely not enough to derail this downward spiral in bonds and upward spike in mortgage rates.
Tomorrow has three pieces of relevant economic data. May’s Durable Goods Orders is the first at 8:30 AM ET tomorrow morning, giving us an indication of manufacturing sector strength. It tracks orders at U.S. factories for big-ticket items, or products that are expected to last three or more years such as electronics and appliances. This data is known to be quite volatile from month to month and is expected to show an increase of 3.0% in new orders from April to May. A large decline would be the ideal scenario for the bond market and would hopefully lead to a decline in mortgage pricing as it would indicate manufacturing sector weakness.
The second report of the day is May’s New Home Sales report at 10:00 AM ET. It helps us measure housing sector strength by tracking sales of newly constructed homes. This report is similar to last week’s Existing Home Sales report, but covers a much smaller portion of sales than last week’s report did. It is expected to show a small increase in sales, but will likely not have much of an impact on mortgage rates because this data gives such a small snapshot of the housing sector. I believe it will take a large rise in sales or a sizable decline for this data to influence mortgage rates.
June’s Consumer Confidence Index (CCI) is the third report of the day. It will also be posted at 10:00 AM ET Tuesday and is important to the financial markets because it measures consumer willingness to spend. If consumers are more confident about their own financial situations, they are more apt to make large purchases in the near future. If it shows a sizable increase in confidence from last month, we can expect to see the bond market falter and mortgage rates rise slightly. Current forecasts are calling for a reading of 74.9, down from last month’s 76.2 reading. The lower the reading, the better the news it is for bonds and mortgage rates.
Overall, it is difficult to label one particular day as the most important of the week. None of the data on the agenda is considered to be highly important, but tomorrow has two of the more important reports of the week. As warned, it is another difficult day for mortgage shoppers. Until the dust settles and logic returns to the market, we will be taking things day by day. And if still floating an interest rate, I strongly recommend being extremely careful and maintain contact with your mortgage professional as it appears that we have more of this to digest.