It’s a slow start to the week but things could certainly pick up over the next few days as news about tax cuts, the next Fed Chair, and the European Central Bank’s bond buying program comes out.
Mortgage rates could definitely experience some volatility but should stay at accommodating levels for borrowers. Read on for more details.
Where are mortgage rates going?
Busy week could cause volatility
Tax reform
Mortgage rates moved a little higher toward the end of last week thanks to a breath of fresh air into Trump’s tax reform plans.
That effort will continue this week as the budget bill that was approved by the Senate last Thursday now goes before the House of Representatives for a vote.
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Word broke over the weekend that President Trump made it very clear to House Republicans that he wants them to push it through so the focus can turn to tax reform. As we saw last week, the market responds favorably to any news that tips the scales toward upcoming tax cuts.
If the budget bill passes this week, another risk-on rally is likely to follow, which would move investors out of bonds and into stocks and bring mortgage rates higher.
Federal Reserve
Another story that picked up last week and is continuing this week is the race for the next Chair of the Federal Reserve. The current Fed Chair, Janet Yellen, will see her term expire in February and it’s up to Trump to reappoint her or nominate another candidate.
Trump stated in an interview over the weekend that he knows that the public consensus is that he will choose either Yellen, Stanford Economist John Taylor, or Fed Governor Jerome Powell.
Right now, financial market participants are leaning toward a Powell nomination but that decision is far from a sure thing.
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Trump isn’t expected to make a decision for another week or so, but in the meantime, any news about the decision could cause a market reaction. Last Tuesday, we saw a slight risk-on rally after it seemed that John Taylor was the new front-runner.
That rally pulled back on Wednesday after the initial buzz subsided with Powell stepping into the spotlight.
European Central Bank
The ECB has an important meeting this Thursday. ECB President Mario Draghi is expected to announce a reduction to their bond purchasing program.
It’s going to be one of the most closely watched events of the week with the definite possibility of a market reaction once the final news breaks.
What does this mean for me?
Find out what your rate would be
Mortgage rates could move around a little this week but we’re still expecting them to stay on the lower end of the spectrum for 2017. That means that right now is a great time to lock in a rate on a purchase or refinance.
If you want to get started and find out what your custom rate would be, you can call one of your mortgage specialists or quickly answer some questions in our Mortgage Builder.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
- It’s a slow start to the week with no significant economic data.
Notable events this week:
Monday:
- Nothing
Tuesday:
- PMI Composite Flash
Wednesday:
- Durable Goods Orders
- New Home Sales
- EIA Petroleum Status Report
Thursday:
- International Trade in Goods
- Jobless Claims
- European Central Bank Meeting
- Pending Home Sales Index
- Fedspeak
Friday:
- GDP
- Consumer Sentiment
from Total Mortgage Blog http://ift.tt/2h1BSML
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