For the second straight week, there was little reaction to the economic news. Neither key data on retail sales and inflation nor the passage of the House tax reform bill had much effect. Mortgage rates finished the week a little lower.
It was clear from Friday’s report on housing starts that home building activity over the last couple of months was significantly impacted by the hurricanes. In October, single-family housing starts rose 5% from September. In the South, the region most heavily affected by the hurricanes, single-family starts jumped 17% from September to the highest level since 2007.
A major step toward tax reform was taken this week when the House of Representatives passed its “Tax Cut and Jobs Act.” There were no major surprises in the bill, so the market reaction was small. There is still much to be done before actual changes to the tax code become law.
The Director of the Consumer Financial Protection Bureau (CFPB), Richard Cordray, announced this week that he will step down from his position by the end of November. During Director Cordray’s five years in office the CFPB implemented many regulatory requirements affecting the mortgage industry. President Trump will nominate the next Director. It is expected that the nominee, like President Trump, will favor a less regulated market.
Looking ahead, Existing Home Sales will be released on Tuesday. The minutes from the November 1 Fed meeting will come out on Wednesday. These detailed minutes provide additional insight into the debate between Fed officials and have the potential to move markets. Durable Orders, Jobless Claims, and Consumer Sentiment also will be released on Wednesday ahead of the holiday. Mortgage markets will be closed on Thursday and will close early on Friday in observance of Thanksgiving.
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