Mortgage Rates Near Post-Election Lows

Mortgage rates held steady to start the new week.  This keeps them in line with the best levels since November 2016.  Generally, today is what we had expected as there were no interesting developments in financial markets or in terms of economic data today.  Most news coverage was focused on the solar eclipse, and I certainly enjoyed it as it was an experience I will never forget. 

Stock indexes still holding but running low on fuel - more pundits and guests on the financial channels looking for a pullback but as numbers grow investors do not want to be the first one out or cutting back. Investors in funds will tear apart any money managers or fund managers hat leave the ship early. Who will be first to start what is overdue for a normal correction?  Could happen on Friday Monday after the global economic brains converge in Jackson Hole – but this is not as easy to predict like today’s eclipse.

The 10yr note yield slipped to 2.18% following Germany’s 10yr bund that dropped.  

Tax cuts - coming at an IRS office near you, but when is the question. I still do not believe it will happen this year but markets may see some sunlight if it is expected that a tax cut will be retroactive to include 2017 income. Even that is questionable because with this political battlefield Democrats smell blood now with elections coming soon. Given the divisions and the present low poll numbers and Republican factures, unless there is a huge change tax cuts and other fiscal spending should be a combat zone in Congress the remainder of the year.  

Do not fret about any government shutdown that theoretically is coming at the end of September. The debt ceiling will be raised - period. Not worth any ink or prefabricated angst that will increase as the date comes into focus.  No real data again tomorrow except for the June FHFA home price index.

In summary, with no major economic reports on this Solar Eclipse Monday we continue to follow the pattern from last week, the slow drift to the bottom of the range leaving us with rates at or near post-election lows.  Rates have been consolidating at this key pivot in treasuries.  I am still advising clients to be locked if closing in next 15 days, of which 30 days is just as safe.