Financing Homes in Lake Tahoe and Truckee since 1992.

Morning Economic Update-June 3, 2013

Tahoe Mortage Rates and Tahoe Home Loan Rates:

Monday’s bond market initially opened in negative territory but has since rebounded into positive ground following much weaker than expected economic news. The stock markets are mixed with the Dow up 60 points and the Nasdaq down 2 points. The bond market is currently up 7/32, which will improve this morning’s mortgage rates by approximately .125 of a discount point. However, that is much better than what early trading indicated we would be at before the data posted.

Today’s only relevant economic data came late this morning when the Institute for Supply Management’s (ISM) posted their manufacturing index for May. They announced a reading of 49.0 that surprised many. This was well below the 50.9 that expected and a sizable decline from April’s 50.7. But more importantly it was below the benchmark reading of 50.0 that points towards economic growth. The sub-50 reading means that more surveyed manufacturers felt business worsened last month than those said it had improved. That is a significant sign of manufacturing sector weakness, making the data very good news for the bond market and mortgage rates.

The rest of the week brings us five more economic reports, one of which is extremely important. Tomorrow’s only data is April’s Goods and Services Trade Balance report. It gives us the size of the U.S. trade deficit and will be released at 8:30 AM ET. It isn’t likely to cause much movement in the markets or mortgage rates and is the week’s least important report, but nevertheless forecasters are expecting to see a $41.1 billion trade deficit. It will take a wide variance from this projection for the data to influence mortgage rates.

Overall, it appears that Friday is the key day of the week with regards to mortgage rate movement with the almighty Employment report on tap. As expected, today is an active day for mortgage rates and we could see the same on Wednesday since there are three reports scheduled for release. Tomorrow will probably be the lightest day unless something totally unexpected happens with stocks. Although, as we have seen many times over the past couple weeks, we don’t have to have an event or economic report released for the bond market and mortgage rates to become volatile. Therefore, it would be prudent to continue to maintain contact with your mortgage professional if still floating an interest rate and closing in the near future.