Mortgage Rates Unchanged

Mortgage rates are unchanged this morning, with no data or driving news.  Early this morning, weekly MBA mortgage applications were reported flat, unchanged from last week. Again, there is no scheduled economic data today. This week is almost absent of any significant data points.

The focus remains on the tax cut bill being marked up this week, as Republicans are working out details. The proposal to tax U.S. companies’ payments to related foreign affiliates was eliminated, a proposed budget $74B shortfall. Now looking for other ways to fill the shortfall from the initial plan. Must stay in line with the budget resolution that was passed a week ago or Democrats could filibuster the tax plan. The revenue from a proposed 20% excise tax on certain corporate payments to related offshore affiliates dropped to about $6.5B from $154.5B. Democrats have offered up many amendments, but all were voted down (as you would expect).

Senate Republicans are considering fully repealing individual federal tax deductions for state and local taxes -- including property taxes. That pill will be hard to swallow. Senators are also discussing preserving the estate tax -- at least in some form. The House is not amenable to keeping the taxes on state and local tax in their plan, capping it at $10K and the House plan will eliminate the estate tax of 40% for married couples’ estates more than $10.98 mil. The Senate Finance Committee plans to release a tax bill as early as tomorrow. The House Ways and Means Committee is working on its bill and hopes to hold a vote tomorrow. Will it all get done by Thanksgiving?

This afternoon at Noon, the Treasury will sell $23B of new 10yr notes.  This auction has significance in terms of demand, with the 10yr at another key technical resistance at 2.32%.

Mortgage rates are likely to move sideways again today. With the lack of economic news due out today the only thing that can move mortgage rates is an unforeseen geopolitical event.