Financing Homes in Lake Tahoe and Truckee since 1992.

Morning Interest Rate Update-May 31, 2013.

Tahoe Mortgage Rates and Tahoe Home Loan Rates:

Friday’s bond market initially opened in positive territory following the release of favorable economic news but has since turned south following late morning data. The stock markets have not having nearly the reaction to the data that bonds are having. The Dow and Nasdaq are both down a couple of points. The bond market is currently down 12/32, which will likely push this morning’s mortgage rates higher by .250 – .375 of a discount point over yesterday’s morning pricing.

Yesterday’s 7-year Treasury Note auction actually went pretty well with several indicators that we use pointing towards a decent level of investor interest. That helped boost bond prices during afternoon trading yesterday and led to some lenders improving rates. Unfortunately, that improvement was erased with this morning’s bond selling.

The Commerce Department gave us April’s Personal Income and Outlays data early this morning with an announcement of a 0.1% increase in income and a 0.2% decline in spending. Both readings were weaker than what analysts were expecting to see (0.1% rise in both). That indicates that consumers had a little less money to spend than thought and actually spent less than they did in March. These readings point towards slower economic activity, making them good news for the bond market and mortgage rates.

Late this morning, the University of Michigan revised their Index of Consumer Sentiment for May. It showed a reading of 85.5 that exceeded forecasts of 83.7. This was the highest reading since July 2007 and indicates that consumers were more optimistic about their own financial situations than analysts expected. Since that usually means consumers are more willing to spend, we consider this bad news for the bond market and mortgage rates.

Next week has come very important economic data scheduled. There are reports that are relevant to the bond market and mortgage rates scheduled four of the five days, including Monday’s ISM manufacturing index. It will be posted late Monday morning and is one of the more important reports we get each month. The week closes with the almighty Employment report next Friday. Look for details on all of next week’s events in Sunday’s weekly preview.