Mortgage rates are moving slightly higher today based on investor optimism that the Republican tax bill will pass through Congress sometime this week. This is why we’re continuing to recommend that borrowers lock in a rate sooner rather than later to try and secure the best rate. Read on for more details.
Where are mortgage rates going?
Tax bill back in focus – upward pressure on rates
The Republican led tax reform effort is back in focus today.
Changes to tax cut legislation on Friday cleared the way for action to be taken this week, with the expectation that Congress will approve the bill sometime this week.
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This wave of tax cut optimism has resulted in a slight shift among financial market participants out of “safer” assets such as government bonds and into riskier assets like stocks.
Looking at the yield on the 10-year Treasury note (the best market indicator of where mortgage rates are going) we can see that it’s up a little over one basis point from where it started the day.
Mortgage backed securities compete for similar investors as the 10-year treasury note so their yields tend to adjust in a similar pattern.
Right now, the situation is one with potential, but there’s not enough activity to cause anything more than some very mild upward pressure on mortgage rates.
It’s important to keep an eye on things as the week progresses, however, because it’s highly likely that mortgage rates rise if and when then tax bill passes a vote.
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Rate/Float Recommendation
Lock now
Mortgage rates are not only poised to rise this week (thanks to the tax bill), but far into 2018 as the Fed continues to gradually raise the nation’s benchmark interest rate.
For this reason, we think that it’s prudent for anyone looking to refinance their current mortgage or purchase a home 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:
Housing Market Index
The housing market index came in at a 74 for December. That’s a little higher than both the previous reading and the consensus that analysts had projected.
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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/2BuElbE
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