Rates for home loans slid as the promise of sweeping tax reform increasingly came into question.
The 30-year fixed-rate mortgage averaged 3.90% during the November 9 week, down from 3.94%, mortgage financier Freddie Mac said Thursday. The 15-year fixed-rate mortgage averaged 3.24%, down three basis points. The 5-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.22%, down from 3.23% during the week.
Bond prices have rebounded, nudging yields down, as Republicans’ promises to enact comprehensive tax reforms has met with stiff pushback from special interests. Mortgage rates track the U.S. 10-year Treasury note.
Investors also worry that the kind of sweeping tax overhaul Republicans have envisioned would spur inflation, making bonds that have already been issued worth less. The plan proposed by the House of Representatives would widen the deficit by $1.7 trillion over a decade, the Congressional Budget Office said Wednesday.
The benchmark 30-year fixed-rate mortgage has averaged 4% so far throughout 2017, defying expectations for a breakout from long-time lows.
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