What’s going on? Tax bill passed, refi applications on the rise.
The US Senate passed its version of the tax bill, which the Congressional Budget Office estimates will result in a $1.4 trillion increase to the national deficit over the next decade. The next step is negotiation between the House and Senate to reconcile their respective versions of the tax bill.
In addition, although mortgage rates have been steady over the past few weeks, refi applications are up. In fact, they are at the highest they’ve been in months.
What does it mean? Rate hikes expected to happen faster.
Changes that are to come with the new tax bill are also affecting forecasters’ predictions: they are now expecting higher federal fund rates, increasing faster than what was originally predicted. This may result in refi applications remaining high in the near term, as there’s now even more of a consensus that rates are going to rise, and soon.
With this increase in refi applications, some lenders could potentially process loans a bit more slowly, so if you have any sort of deadline, it’s important to keep this in mind.
Why should you care? Time is money
With applications on the rise, and rate hikes in the near future, it’s clear that refinancers are looking to lock in low rates while they can. Is now your moment to lock in that low rate? With the first rate hike predicted next week, this could be your chance.