Tax plan, new Fed chair leads to slight drop in mortgage rates

Mortgage rates fell slightly across the board after the release of the Republican Party tax plan and the nomination of a new Federal Reserve chairman.

The 30-year fixed-rate mortgage averaged 3.9% for the week ending Nov. 9, down from last week when it averaged 3.94%, according to Freddie Mac. A year ago at this time, the 30-year fixed-rate mortgage averaged 3.57%.

"Mortgage rates ticked downward at the end of last week following the release of the GOP tax plan and have held steady early this week," Aaron Terrazas, Zillow's senior economist, said when that company released its own rate tracker on Wednesday.

"The much-anticipated official nomination of Jerome Powell as the next chair of the Federal Reserve and strong jobs report were already priced in, and had little impact on rates."
During this week, "the 10-year Treasury yield fell roughly 7 basis points, while the 30-year mortgage rate dropped 4 basis points," Sean Becketti, Freddie Mac's chief economist, said in a press release.

The 15-year fixed-rate mortgage this week averaged 3.24%, Freddie Mac said, down from last week when it averaged 3.27%. A year ago at this time, the 15-year fixed-rate mortgage averaged 2.88%.

The five-year Treasury-indexed hybrid adjustable-rate mortgage averaged 3.22% this week with an average 0.5 point, down from last week when it averaged 3.23%. A year ago at this time, the five-year adjustable-rate mortgage averaged 2.88%.

The progress, or lack thereof, on tax reform is the likely catalyst for any significant movement in rates over the week ahead. "There are no major economic releases scheduled for this week, so markets are likely to be watching for any major announcements on tax reform progress," Zillow's Terrazas said.