Lake Tahoe Mortgage Rates and Lake Tahoe Home Loan Rates:
Thursday’s bond market has opened in negative territory as stocks rebound modestly from yesterday’s sell off that pushed the Dow lower by almost 217 points. The Dow is currently up 32 points while the Nasdaq has gained 10 points. The bond market is currently down 7/32, which will likely push this morning’s mortgage rates higher by approximately .125 of a discount point.
Yesterday afternoon’s Fed Beige Book report gave us mixed results. It indicated that economic activity grew modestly in most of the Fed regions with only one reporting solid growth. Since it did show growth and not much of a slowdown, we could consider the news negative for the bond market and mortgage rates. However, many analysts were expecting to see more activity in more regions, meaning that some consider the data disappointing. Generally speaking, I consider the report neutral for our purposes- mortgage rates. There wasn’t much in the release to be optimistic or concerned about. Although, it is my opinion it does lean a little towards my theory that the economy does not have the traction or is as strong as many were predicting. The more data we see that supports that theory, the more likelihood we will see a sizable drop in stocks soon that would lead to a nice downward trend in mortgage rates.
The Labor Department announced early this morning that 346,000 new claims for unemployment benefits were filed last week. This was close to forecasts of 348,000 and a decline from the previous week’s revised total of 357,000, making the data negative for the bond market and mortgage pricing as it hints at a strengthening employment sector. Fortunately, the number was close to forecasts and the markets are much more interested in tomorrow’s major data.
Tomorrow morning brings us the release of the almighty monthly Employment report at 8:30 AM ET. It is arguably the single most important report that we see each month, giving us key employment readings such as the U.S. unemployment rate and the number of jobs added or lost during the month. Analysts are expecting to see that the unemployment rate remained unchanged at 7.5% in May while approximately 159,000 jobs were added to the economy. A higher than expected unemployment rate and a much smaller number than the 159,000 new payrolls would be great news for the bond market. It would probably create a sizable rally in bonds, leading to lower mortgage rates tomorrow. However, stronger than expected numbers may lead to another spike in mortgage rates, so proceed cautiously if still floating an interest rate. Look for it to be an active morning in the financial and mortgage markets.