Financial markets are optimistic as we start the week as they react to the passage of the Republican tax bill through the Senate early Saturday morning. We’re seeing some upward pressure on mortgage rates as a result, which is something we’d been anticipating would happen. Read on for more details.
Where are mortgage rates going?
Rates rise after tax bill passes Senate vote
The big news over the weekend was the Republican led tax bill passing through the Senate early on Saturday morning with a vote of 51-49.
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With the bill clearing the Senate, it’s a major step forward for sweeping tax reform, the likes of which hasn’t happened in over three decades. One of the most significant changes to the tax code for investors is the dropping of the corporate tax rate from 35 percent to 20 percent.
Financial market participants are taking the news well this morning with stocks sharply higher. If we look 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 three basis points.
Mortgage rates typically move in the same direction as the 10-year yield, so rates are dealing with some upward pressure as we start the week.
This isn’t really a surprise to anyone who was been following the situation, as it was widely anticipated that rates would increase if Republicans were able to get the tax bill through the Senate.
The next step of the process for lawmakers is to reconcile the differences in the House and Senate versions of the bill into one final version.
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Mortgage rates are in a position where they are far more likely to rise over the coming weeks and months than they are to fall. For that reason, we are recommending that anyone thinking about buying a home or refinancing their current mortgage takes action sooner rather than later.
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Today’s economic data:
Factory Orders
Factory orders for October fell 0.1%. That’s down from the prior reading of 1.4% but better than the consensus for -0.4%.
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Notable events this week:
Monday:
- Factory Orders
Tuesday:
- International Trade
- PMI Services Index
- ISM Non-Mfg Index
Wednesday:
- ADP Employment Report
- Productivity and Costs
- EIA Petroleum Status Report
Thursday:
- Jobless Claims
- Fedspeak
Friday:
- Employment Situation
- Consumer Sentiment
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from Total Mortgage Blog http://ift.tt/2iKOkF0
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