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Busy December on Tap: The Weekly Market Update

Busy December on Tap: The Weekly Market Update
McLean Mortgage

Interest Rates & Taxes

Interest Rates & Taxes

As we approach December, we can see that we are in for a busy month with regard to the economy. With the recovery continuing from the Hurricanes, the Federal Reserve Board’s Open Market Committee will also be meeting with the consensus pointing to another increase in short-term interest rates. Outside of major shocks, the only factor which seems like it has the potential to change the Fed’s mind would be a very weak employment report. This report is due out in early December.

Meanwhile, all eyes will be on Congress as they continue to hash out details of the tax reform proposals. There is an overwhelming amount of media stories streaming from this effort and for good reason. This effort to enact such a radical change will have a profound affect upon businesses and consumers. No industry seems to be more in the cross-hairs than real estate — one of the last remaining tax havens.

Just to make things more interesting, the markets will be watching reports from on-line and bricks and mortar retailers. Traditionally, Black Friday kicks off the buying frenzy for the holiday season. Sales made during this season will tell us much about the state of the economy moving into 2018. From there we will see speculation about how many times the Fed intends to raise rates in the coming year. They keep using the word “gradual,” but that word is too nebulous and won’t keep market analysts from speculating.

The Weekly Market Update

Rates were down slightly in the past week, with the survey being released one-day early because of Thanksgiving. For the week ending November 22, Freddie Mac announced that 30-year fixed rates fell to 3.92% from 3.95% the week before. The average for 15-year loans increased one tick to 3.32%. The average for five-year adjustables also increased one tick to 3.22%. A year ago, 30-year fixed rates averaged 4.03%, slightly higher than today.

Attributed to Sean Becketti, chief economist, Freddie Mac — “Rates dipped slightly in a short week leading up to the Thanksgiving holiday. The 10-year Treasury yield fell roughly 4 basis points, while 30-year fixed rates dropped 3 basis points to 3.92 percent. Rates on home loans continue to remain low.”

Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.