On Tuesday President Trump will deliver the annual State of the Union Address to Congress. Some people think that Congress should work towards increasing the Federal minimum wage. If anyone knows about doing the minimum for their wage it seems like a great place to start.
What legislative priorities will the President focus on in his speech? Any emphasis on infrastructure spending could add fuel to the fire in terms of mortgage rates increasing.
The tax reform law which passed in December has already added $1.5 trillion in deficit spending over the next decade. Additional infrastructure investment without means to pay for it would put further pressure on interest rates to move higher (CLICK HERE to learn how).
Interest rates are currently at the highest levels since April of 2014. There are a variety of factors contributing to higher home loan rates.
Notably the Fed has been hiking short-term interest rates for the past couple years and the longer end of the yield curve has remained flat. It appears longer durations are following suit.
In addition, although inflation measures remain tepid the economy is growing and unemployment is near historic lows. Speaking of employment we’ll get a new all-important jobs report this Friday. The markets are currently expecting ~190,000 new jobs.
On Tuesday the latest S&P Corelogic Case-Shiller Home Price Index will be released as well as Consumer Confidence.
This column has been recommending a locking position ever since the US 10-year treasury note eclipsed 2.50% back on January 10th. Since then mortgage rates have increased by .25%-.375%. I continue to recommend a locking stance.
Current Outlook: locking