Mortgage Rate Update December 17, 2012

Posted on by Evan in Rate Update

Note rates went unchanged last week but the associated closing costs are slightly worse as we start the last full week of the year.

THE GOP HAS MADE A NEW PROPOSAL FOR A BUDGET DEAL BUT STILL NO AGREEMENT.
THE GOP HAS MADE A NEW PROPOSAL FOR A BUDGET DEAL BUT STILL NO AGREEMENT.

As much as I would love to write about anything other than the fiscal cliff it remains the most prominent focal point for the financial markets.  Over the weekend the GOP proposed a new plan that includes tax rate increases for households making more than $1.0 million per year.  Democrats have yet to respond but some believe this is a positive sign towards getting a budget deal passed.

I remain skeptical.  It looks increasingly likely that lawmakers will let the economy go over the cliff and then vote to “lower” tax rates in the new year.  I also don’t believe the fallout from such an event will be as catastrophic as some in the media would have you believe.

Looking ahead for the week the US treasury is set to auction $113 billion in new debt.  Auctions begin today with $35 billion in 2-year notes and conclude Thursday.  The additional supply may make it tough for mortgage rates to improve this week.

The economic calendar gets busy Thursday and Friday so we could see some volatility at the tail end of the week.  In the meantime, I’ll maintain a floating position.

Current Outlook: floating