Mortgage Rates at Highest Levels to End November

Mortgage rates actually continued higher today at the same quicker pace seen yesterday.  Due to the relatively narrow range during November, rates are now in line with their highest levels in more than a month whereas they were at 2-week lows just 2 days ago. 

It never surprises me that on Thursdays after Freddie comes out with their weekly rates, that several people call and want to know if they should refinance “again”.  Today, I had two such calls and both times, I had to educate them to state that the rates have gone up a bit in the last few days, as the data that was reported is stale and the survey failed to account for changes over the past 2 days.

Mortgage rates actually continued higher today at the same quicker pace seen yesterday.  Due to the relatively narrow range during November, rates are now in line with their highest levels in more than a month whereas they were at 2-week lows just 2 days ago. 

OPEC and non OPEC oil producers were meeting today and expected to extend output cuts until the end of 2018 to finish clearing a global glut of crude while signaling they could exit the deal earlier if the market overheats. The cuts back to 1.8 million barrels/day was due to expire in March 2018. 

Today was the day the Senate votes on its tax plan – but only if Republicans can be assured of the necessary votes to pass, if not there will be no vote. Still discussing corporate tax cuts that were slated at 20%, a new proposal suggested cutting the corporate rate to 22 per cent instead of 20 per cent in an effort to fund extra support for working families in the overhaul. Is it a huge deal, taking 2.0% away from the goal of 20%? Lobbyists think so given remarks that less generous cut would also unsettle companies - bull. If companies cannot survive with a cut of 13% rather than 15% of their taxes they likely will not last long. Deficit concerns among a couple of Republican Senators want a trigger mechanism that would automatically reverse some cuts if assumptions about how they would generate sufficient economic growth to “pay for themselves” turned out to be over-optimistic. The plan calls for permanent cuts. The Senate plans to vote on the bill late tonight or tomorrow.

Technically speaking, the 10yr moved from its resistance at 2.32% on Tuesday to now at its near term technical support at 2.40%. The last month the 10yr has stayed between 2.32% and 2.40% and has kept mortgage rates flat the last month. Inflation today (Oct PCE) is still not close to the Fed’s target, but markets remain convinced the Fed will raise its FF rate at the December meeting in about two weeks. The short end of the yield curve (2s thru 5s) have moved higher in anticipation of the increase. The long end (mortgages) focusing more on the lack of inflation and have not increased.