Lake Tahoe Mortgage Rates and Lake Tahoe Home Loans:
Friday’s bond market has opened relatively flat following mixed results from today’s economic data. The stock markets are very calm with the Dow nearly unchanged from yesterday’s close while the Nasdaq is up 4 points. The bond market is currently down 2/32, but I don’t believe we will see a noticeable difference in this morning’s mortgage rates.
July’s Housing Starts was the first of this morning’s three economic reports. The Commerce Department announced at 8:30 AM ET that new housing construction starts rose 5.9% last month. This was a smaller percentage increase than was expected by analysts, but the number of starts was close to forecasts. The difference came in an upward revision of 10,000 to June’s previously announced 836,000 starts. In other words, the number of projects started in July was pretty much what many had expected although the percentage upward was smaller than thought. That makes the data relatively neutral for the bond market and mortgage rates. It was still a fairly large jump, indicating housing sector strength, so it could be construed as slightly negative by some traders.
The second report of the morning also came at 8:30 AM when Employee Productivity and Costs data for the second quarter was released. The Labor Department posted a much stronger than predicted reading of up 0.9%. Analysts were calling for no change from the first three months of the year. Therefore, the headline number is actually good news for the bond market and mortgage rates. Unfortunately, the second reading that is closely watched tracks labor costs and it revealed a 1.4% increase that greatly exceeded forecasts. The cost reading raises wage-inflation concerns and hints that consumers may have more money to spend, fueling economic growth. However, the mixed results offset each other, which prevented the markets from reacting to the data in a positive or negative way.
Late this morning, the University of Michigan posted their Index of Consumer Sentiment for August. They announced a reading of 80.0 that fell well short of analysts’ forecasts. It was expected to come in with little change from July’s 85.1. What this means is that surveyed consumers were much less optimistic about their own financial situations than many had thought. That makes the data favorable for the bond and mortgage markets because waning confidence usually means consumers are less likely to make a large purchase in the near future, limiting economic growth. This news has helped to keep the bond market close to yesterday’s level, at least during early trading. It has been common for bonds to weaken during Friday afternoon trading, so proceed cautiously as we head into the weekend.
Next week is pretty light in terms of the number of economic reports and other events scheduled for release. There are only a couple releases scheduled and the primary theme of those is housing sector data. We will also get the minutes from the most recent FOMC meeting in the middle of the week. There is nothing of importance scheduled for Monday, so we can expect weekend news and early stock movement to help set the tone early in the week.