Bond yields rise this week – The 10-year Treasury bond closed the week at 2.40, up from 2.34% last week. The 30-year treasury yield ended the week at 2.88%, up from 2.82% last week. Mortgage rates follow treasury bond yields so we watch bond yields carefully.
Mortgage Rates down slightly this week – The November 9, 2017 Freddie Mac Primary Mortgage Survey reported that the 30-year fixed mortgage rate average was 3.90%, slightly lower than 3.94% last week. The 15-year fixed was 3.24%, slightly down from 3.27% last week. The 5-year ARM was 3.22%, also almost unchanged from 3.23% last week.
Real Estate Organizations oppose both the senate and house tax plans – According to The National Association of Realtors, The California Association of Realtors, state’s Realtor associations, The National Association of Home Builders and other real estate groups, the proposed bills will actually increase taxes for middle class homeowners. Real estate groups oppose the plan because it cuts the mortgage interest deduction in half from the interest paid on a maximum of a $1,000,000 loan to the interest paid on a maximum of a $500,000 loan. It also eliminates deductions of state and local taxes. This would include property tax. The house bill would allow a maximum of $10,000 deducted a year in property tax, while the senate bill would allow no deduction for property tax. State and local taxes, which include property taxes, have been deductible since congress passed a federal income tax in 1909, which was implemented in 1913. This is a very controversial portion of tax reform. Neither plan has passed. It is possible that these changes may not be in the final bill.