|Mortgage Rates Higher After Tax Plan
September 29, 2017
Mortgage rates went on a bumpy ride this week, ultimately matching their highest levels in roughly 2 months. The motivations were more complex, but the key development was the bond market’s reaction to the unveiling of the Trump Administration’s tax proposal.
The net effect was a relatively abrupt move higher on Wednesday and Thursday with the rest of the week being largely uneventful.
Despite the volatility, the recent range remains narrow. Most borrowers are seeing rates that are an eighth of a point higher than recent lows, with the average top-tier conventional 30yr fixed quote near 4.0%.
–Matt Graham, Mortgage News Daily
30 Year Fixed Rate Mortgage
Week in Review
Rates shown below are based on the 30 Year Fixed Rate Mortgage
Friday, September 22, 2017 : 3.97% (+0.00%)
Mortgage rates held their ground yesterday. That was a refreshing development given the abrupt move higher over the past 2 weeks and a relatively threatening reaction to Wednesday’s Federal Reserve events. Now again today, rates have managed to hold their ground. In some cases, lenders improved by token amounts. If yesterday was refreshing, today would be doubly so.
More detail: “Rates Show Resilience But Not Without Help”
Monday, September 25, 2017 : 3.97% (+0.00%)
Mortgage rates held their ground yet again, and are finally starting to look resilient after a relatively sharp move higher over the past 2 weeks. This was true even before mid-day headlines put additional downward pressure on rates. The headlines in question quoted North Korean officials saying that the US had “declared war” and that North Korea had the right to shoot down US warplanes even outside North Korean airspace. When news headlines include the words “US, declares, and war” financial markets tend to respond, even if much of that response is driven by headline-reading trading algorithms.
More detail: “Mortgage Rate Resilience Continues “
Tuesday, September 26, 2017 : 3.95% (-0.02%)
Mortgage rates improved moderately today, making this the 4th straight business day without any new weakness (aka “higher rates”). It’s necessary to include “days that haven’t been bad” in that tally because two of them merely saw rates hold flat. That’s about as much of a victory as we have been able to hope for ever since Septembers abrupt little rate spike began just over 2 weeks ago. What are we talking about here in terms of actual damage?
More detail: “4th Straight Day Without Bad News For Mortgage Rates”
Wednesday, September 27, 2017 : 3.98% (+0.03%)
First thing’s first: mortgage rates didn’t have nearly as bad a day as US Treasuries. The latter serve as a general benchmark for the former, but can take cues from different sources with varying levels of intensity. Today’s most widely-discussed cue was yesterday afternoon’s release (or “leak”) of Trump’s tax plan. It’s essentially a thorough bullet-point list that serves as a starting point for a drawn-out legislative process. At the end of the day, actual tax reform may be quite a bit different than the details being circulated today. That fact may help explain why there wasn’t a bigger, more unified reaction in other markets (like stocks).
More detail: “Mortgage Rates Jolted Higher By Tax Plans”
Thursday, September 28, 2017 : 3.99% (+0.01%)
Mortgage rates were decidedly higher this morning, with most lenders back above last week’s highs. At the time, those were the highest rates in more than a month, although the range has been relatively narrow. Underlying bond markets improved throughout the day, however, resulting in a fair amount of lenders revising rate sheets for the better. After those revisions, rates are pretty close to yesterday’s levels.
More detail: “Mortgage Rates Trying to Find a Ceiling”
Friday, September 29, 2017 : 3.97% (-0.02%)
Mortgage rates moved lower today, even though underlying bond markets (which ultimately drive rates) suggested a move higher. This happens from time to time and it’s usually a factor of timing. Today is no different. Bond markets were improving throughout the day yesterday, but started out at much weaker levels. Bond market weakness is associated with higher rates. As such, yesterday’s rates were the highest we’d seen in roughly 2 months. As bonds improved throughout the day, many lenders abstained when it arguably became time to release friendlier rate sheets.
More detail: “Mortgage Rates Back Down From 2-Month Highs”