The Republican tax bill is moving closer and closer to becoming a reality.
Financial market participants are anticipating it’s approval and moving more into stocks this week, pushing mortgage rates higher.
This is why we believe it’s smart for anyone looking to refinance or purchase to take action sooner rather than later. Read on for more details.
Market Outlook 12.18.17 from Total Mortgage on Vimeo.
Where are mortgage rates going?
Rates rise as tax bill vote looms closer
Mortgage rates rose yesterday after financial market participants became very optimistic that the Republican tax bill will get passed sometime this week.
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That optimism is continuing to put upward pressure on rates as a House vote is expected later today, and a Senate vote sometime tomorrow.
The fact that one of the key pieces of the legislation is a large reduction to the corporate tax rate has given many investors more confidence to move out of the “safe” play of government bonds and into the “riskier” position of holding assets like stocks.
Since mortgage backed securities (MBS) compete for similar investors as government bonds, specifically the 10-year Treasury note, when bond yields adjust, so do MBS yields and therefore, mortgage rates.
If we take a look at the yield on the 10-year Treasury note today, we can see that it’s currently at 2.429%. That’s up a little less than four basis points from where it started the day. It’s also its highest position since about a month ago.
With Treasury yields rising, mortgage rates are trending higher–something that we’ve been anticipating would happen for a while.
On top of all the tax bill excitement, Housing Starts for November came in above expectations, giving investors one more reason to move more into stocks and out of bonds.
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Rate/Float Recommendation
Lock now
Mortgage rates are moving higher. Given that we expect this trend to continue over the coming weeks and months, we are strongly recommending that borrowers lock in a rate sooner rather than later in order to try and get the best rate.
Click here to head to our Mortgage Builder and figure out how much you could save.
Today’s economic data:
Housing Starts
Housing starts for November came in at an annualized rate of 1.297 million. Housing permits for November came in at an annualized rate of 1.298 million.
Fedspeak
- Minneapolis Fed President Neel Kashkari at 1:10pm
Get the GreenLight and close in 21 days*
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/2yXWhZc
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