Mortgage Rates Rise on Economic Data from European Union, Senate Tax Reform Bill

Mortgage rates rose about five basis points at the end of last week on strong economic data coming from the European Union and on the Senate’s tax reform bill. They held steady at this higher level for the first half of the week.

For much of last week, mortgage rates were mostly flat with no major economic releases. Rates climbed late in the week following the Senate’s release on Thursday of a tax reform bill and the European Union’s Friday report of strong economic data. The EU’s strong outlook boosted investor confidence, which pushed the sale of government bonds and put upward pressure on rates.

With little happening in the beginning of this week, mortgage rates have largely stayed the same. The Consumer Price Index (CPI) data—one of two key government-reported measures of inflation and the big economic data release of the week—came in slightly above expectations on Wednesday, but not enough to move rates.

Markets are watching Republican tax reform bills, awaiting a House vote on Thursday. Although not all House Republicans are on board, there is a good chance it will pass. If that happens, investors may celebrate the proposed tax cuts, which could send mortgage rates higher.