I want to take a moment to wish you and your family a Happy Thanksgiving! I am grateful for my audience that values professional and competent home loan advice.
Last week mortgage rates mostly held steady although pricing did worsen modestly.
DON’T FEAR THE FED
We are now 23 days away from the next Fed meeting and the markets are currently assigning a 92% probability that the Fed will hike short-term interest rates by .25%. I anticipate the media will pick up on this coverage after the Thanksgiving Holiday. As a reminder, the Fed DOES NOT directly control mortgage rates.
GOP TAX OVERHAUL
I believe mortgage rates will sway with sentiment on the GOP tax overhaul plan. If the House or Senate tax bill passes then the United States will experience higher deficit spending which is not good for mortgage rates.
Therefore, if it appears more likely that a bill will pass I expect home loan rates to worsen and vice versa. I believe the road to passage will be difficult so will recommend floating.
Current Outlook: cautiously floating