Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:
Tuesday’s bond market initially opened in positive territory but has since moved into negative ground after digesting this morning’s economic news. The major stock indexes are showing sizable gains with the Dow up 97 points and the Nasdaq up 16 points. The bond market is currently down 10/32, but due to a nice rally in bonds late yesterday, we should still see a small improvement in this morning’s mortgage rates if comparing to Monday’s morning pricing.
May’s Durable Goods Orders was the first of today’s three reports, revealing a 3.6% increase in new orders at U.S. factories for big-ticket items. This was a bit stronger than the 3.0% that was expected, however, since this data is known to be volatile the amount of the variance was not significant enough to cause any concern. A secondary reading that tracks orders excluding larger more volatile transportation-related products such as new airplanes came in with a 0.7% increase when it was forecasted to fall 0.5%. Therefore, we should consider the news slightly negative for the bond market and mortgage rates. Still, the markets are reacting more to the late morning data than this report.
The second report of the day was May’s New Home Sales report at 10:00 AM ET. The Commerce Department announced a 2.0% rise in sales of newly constructed homes last month. This was stronger than expected, but also not enough to draw much interest from bond traders since it covers such a small percentage of all home sales in the U.S.
June’s Consumer Confidence Index (CCI) was the final report of the day and it is drawing plenty of attention. The Conference Board announced late this morning that their CCI rose to 81.4 this month, exceeding forecasts and its highest reading since January 2008. This means more surveyed consumers felt better about their own financial and employment situations than many had thought. That makes the data bad news for the bond and mortgage markets because rising confidence means consumers are more apt to make large purchases in the near future, fueling economic growth. It is this report that has bond traders concerned this morning and has led to bond’s falling into negative ground.
Tomorrow’s only economic data is the final reading to the 1st Quarter Gross Domestic Product (GDP). The GDP is the sum of all products and services produced in the U.S. and is considered to be the best measurement of economic growth or contraction. However, this particular data is quite aged now (covers January through March) and will likely have little impact on the bond market or mortgage pricing unless it varies greatly from previous readings. Market participants are looking more towards next month’s release of this quarter’s initial GDP reading. Last month’s first revision showed a 2.4% rise in the GDP, which is what analysts are expecting to see again. An increase would be considered negative for rates as it means stronger economic activity.
Tomorrow also has the first of this week’s two Treasury auctions that have the potential to affect mortgage-related bonds if they show particularly strong or weak investor demand. The Treasury will sell 5-year Notes tomorrow and 7-year Notes Thursday. If they are met with a strong demand, we could see bond prices rise during afternoon trading. This could lead to afternoon improvements to mortgage rates also. But, if the sales draw a lackluster interest from investors, mortgage rates may move higher during afternoon trading.