As expected, the Republican tax bill stole the show this week, passing through Congress on Wednesday. That created a sell-off in the bond market which resulted in some serious upward pressure for mortgage rates.
With rates expected to continue moving higher over the coming weeks and months, we think it makes sense for borrowers to lock in a rate sooner rather than later. Read on for more details.
Where are mortgage rates going?
Rates jump after tax bill gets passed
It’s been a notable week for mortgage rates, with a big spike due to the passage of the Republican tax bill on Wednesday.
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That bill, which includes a significant reduction to the corporate tax rate, caused a sell-off in bonds and a rally in stocks, pushing the yield on the 10-year Treasury note (which is the best market indicator of where mortgage rates are going) up to nearly 2.49%.
That’s just about twelve basis points higher than where it started the week. And if we take a look back at this year, we can see that the 10-year yield hasn’t been at this level since March, which is when mortgage rates hit their highest point of the year in the Freddie Mac Primary Mortgage Market Survey.
So with a big jump in the 10-year yield, mortgage rates are dealing with some upward pressure as we head into the holiday weekend.
This news really isn’t much of a shock for anyone who has been watching the market, as a rise in Treasury yields and mortgage rates had been widely anticipated to happen. Looking ahead to the coming weeks and months, we’re expecting more of the same.
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Rate/Float Recommendation
Lock now
Mortgage rates ticked higher this week, a trend that is expected to continue for some time. Given that expectation, we think it’s prudent for anyone looking to buy a home or refinance their mortgage to lock in a rate sooner rather than later.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
Durable Goods Orders
The durable goods orders data for November is in. New orders ticked up 1.3%, month over month, putting them at 8.2%, year over year. Ex-transportation fell 0.1%, month over month, putting them at 7.0%, year over year. Core capital goods also fell 0.1%, month over month, and are now at 8.1%, year over year.
Personal Income and Outlays
Personal income rose 0.3%, month over month in November. Consumer spending ticked up 0.6%, month over month. The PCE Price Index rose 0.2%, month over month, putting it at 1.8% year over year. Core PCE ticked up 0.1%, bringing it to 1.5%, year over year.
New Home Sales
New home sales for November came in at an annualized rate of 733,000. That’s a monthly jump of 17.5%, which is the largest in 25 years.
Consumer Sentiment
Consumer sentiment softened to 95.9 in December, from 96.8 in November.
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Notable events this week:
Monday:
- Housing Market Index
Tuesday:
- Housing Starts
- Fedspeak
Wednesday:
- Existing Home Sales
- EIA Petroleum Status Report
Thursday:
- GDP
- Jobless Claims
- Philly Fed Business Outlook
Friday:
- Durable Goods Orders
- Personal Income and Outlays
- New Home Sales
- Consumer Sentiment
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from Total Mortgage Blog http://ift.tt/2kGUqDY
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