The biggest impact on mortgage interest rates this week was the passage of the budget plan by the Senate which is considered step towards the passage of Tax Reform. The passage of a tax reform bill is viewed negatively by the bond markets since a reduction in the tax rates as currently proposed would stimulate economic growth and potentially inflation. Secondly, it is understood that the tax reform plan as currently proposed will increase the deficit. As a result, mortgage interest rates ended the week higher than last week.
Next week the following events will occur and economic reports will be released. All of which could impact mortgage interest rates.
- The Durable Orders report and the New Home Sales report will be released on Wednesday;
- The Pending Home Sales report will be released and the European Central Bank will be held on Thursday;
- Third Quarter GDP estimates will be released on Friday.