Lake Tahoe and Truckee Daily Mortgage Rate Lock Advisory
Monday’s bond market has opened in negative territory due to this morning’s economic data giving us unfavorable results. The stock markets are in rally mode with the Dow up 158 points and the Nasdaq up 47 points. The bond market is currently down 5/32, but we should still see an improvement of approximately .250 of a discount point in this morning’s mortgage rates due to strength in bonds late Friday.
The Institute of Supply Management (ISM) gave us today’s only relevant economic data with the release of their June manufacturing index at 10:00 AM ET this morning. This index measures manufacturer sentiment by surveying trade executives on current business conditions. It revealed a reading of 50.9 that exceeded forecasts of 50.5, indicating manufacturer sentiment strengthened a little last month. More importantly than the larger than expected increase is that fact that it rose above 50.0. That threshold is considered the benchmark for manufacturing growth. Anything below 50.0 points to a softening manufacturing sector.
Tomorrow also has only one report worth watching. That would be May’s Factory Orders data from the Commerce Department late tomorrow morning. This report is similar to the Durable Goods Orders report that was released last week, but tracks orders for both durable (electronics, appliances, autos, etc) and non-durable goods (food, clothing, etc). It usually doesn’t have as much of an impact on the bond market as the durable goods data does, but can lead to changes in mortgage pricing if it varies greatly from forecasts. Current expectations are showing a 2.0% increase in new orders from April’s levels, pointing towards sector strength. A decline in orders would be considered good news for the bond market and could help lower mortgage rates slightly tomorrow.
Overall, this is likely going to be a fairly active week for the financial and mortgage markets. The most important day of the week is Friday with the almighty monthly Employment report being released that day. The least important will probably be tomorrow or Wednesday morning, although we may see some volatility Wednesday afternoon as the markets close early ahead of July 4th on Thursday when the markets will be closed. I strongly recommend maintaining contact with your mortgage professional if still floating an interest rate as we may see some relatively strong volatility without warning.
If I were considering financing/refinancing a Lake Tahoe or Truckee home, I would…. Lock if my closing was taking place within 7 days… Lock if my closing was taking place between 8 and 20 days… Lock if my closing was taking place between 21 and 60 days… Float if my closing was taking place over 60 days from now… This is only my opinion of what I would do if I were financing a home. It is only an opinion and cannot be guaranteed to be in the best interest of all/any other borrowers.