Tax cuts and rate hikes with Powell in the wings… these are a few of my favorite things.
Photo by Jorge Alcala on Unsplash
House and Senate negotiators are working on their first edits to the newly proposed tax legislation. Both sides have agreed (not officially) to limit the deduction for mortgage interest on loans to $750,000 or less, as compared to the $500,000 that the House’s original bill called for. Bloomberg has a nice article on the details here. This is a far cry from some game-changing negotiation, but it might soften the blow for the valued tax break. As a refresher, the current law limits the MID (mortgage interest deduction) to loans of $1M or less and the House’s original proposal caused a formidable groan across the housing industry… hopefully they’ll come to terms soon.
Like a made-for-TV western, Janet Yellen will ride off into the sunset after the Federal Open Market Committee’s last meeting of the year, which takes place today. Yellen is expected to hold a press conference immediately after the meeting and it looks like her final farewell will be… a rate hike. This will be the Fed’s third bump this year. With the unemployment rate continuing to fall and pay increases on the rise… we’re looking at possibly four rate hikes in 2018. That said, some economists believe that the impact of the rate hike on mortgage rates will not exactly rock our world, but the impending tax cuts could hinder our growth… hey, at least they agreed on $750k… right?
The opinions expressed in this post are the sole view of the writer and do not reflect the opinion of Princeton Mortgage Corporation.