Mortgage Rates Cap Three-Day Big Increase

Mortgage rates edged just slightly higher again today, capping the sharpest 3-day increase since late June and leaving the average lender more than an eighth of a percentage point higher than they were on Monday.  While an eighth of a point may have been a fairly typical "big week" in previous years, it has been uncommon in 2017 - especially since the range of rates began to narrow at the end of October.

The tax bill has not yet become official (bill not signed) but some large businesses jumped in today to announce higher pay and bonuses for workers. NBCUniversal and CNBC parent Comcast, as well as Boeing, AT&T and Wells Fargo also announced some increases in expenses.

Congress working on a short-term bill to keep the government running after this Saturday - gets attention but a relief bill will get done to avoid a government shutdown. The House resolution would fund the government until Jan 19th and would allow Trump to sign the tax bill before the end of the year instead of waiting until after the first of the year. The resolution has $2.85B for the popular Children's Health Insurance Program and $750 mil for diabetes programs and community health centers. Republicans calling it a “clean” bill that defines a bill that does not have any contentious issues in it. According to media reports though there is a "pay-go" waiver - a provision in the budget that prohibit the government from enacting big new expenditures, such as the GOP tax cuts, unless there is money in the current year's budget to pay for them.

Trading tomorrow will be very thin with many taking a long holiday but there are three very interesting economic reports tomorrow. Normally they all would or could have market impact, however current economic data is not what it normally is now with 100% focus on 2018 and the impact of tax cuts.

I am not expecting much change in the bond and mortgage markets tomorrow.  Unlikely new positions - buying or selling - will be initiated with the long weekend ahead. My reports tomorrow will be late with some closings I like to attend, but they will be here.

In summary, rates have been hammered over the last couple days following the bond sell off.    It appears to me that secondary departments have worsened sheets more than the price drop justifies.    At this point, you may want to be cautious with your lock (I am not saying to float) as the three-day holiday is upon us – and most traders have already clocked out for the holiday weekend since tomorrow is a short trading day.