It’s not passed yet but this is earlier than I expected so hopefully they can get it done in time.
Mortgage rates are like gasoline prices though – quick to go up, and sloowww to come down.
If they can pass this by Wednesday/Thursday and rates improve a little by the weekend, we might get a surge of buyer interest over the next couple of weeks. Home buyers who want to get into their new house before school starts need to secure something soon because many if not most sellers need a 30-60 day rentback after close – which after you count a 30-day escrow, it means that many buyers are already scheduling to pick up their keys at the end of summer.
I think there are waves or surges in the market, and not in a cosmic way. It’s just natural that some weeks are better than others for pursuing a new home, and people work in their searches around holidays and other family/work obigations. It would make sense that the same market forces are affecting the entire buyer pool in a similar direction.
Based on my previous guess below from March, we might be at the tail end of the selling season, but the demand has been strong enough that we should have some gas left in the tank. The next couple of weeks will probably be the high point for the rest of the year though.
https://www.bubbleinfo.com/2023/03/22/whats-left-of-spring-selling-season/
The bill’s passage in Congress is not guaranteed. Today’s newsletter will explain the deal struck by Biden and McCarthy — and the main thing that could still go wrong.
A bipartisan deal
The final agreement is a compromise. Many Republicans wanted steeper cuts, and many Democrats wanted no cuts. The deal landed in between. “I don’t think everybody is going to be happy at the end of the day,” McCarthy said on Thursday. “That’s not how this system works.”
First, the deal would raise the debt limit for two years. This moves any future debt limit fight to after the 2024 election.
The spending caps at the center of the agreement target federal programs besides Social Security, Medicare, Medicaid and the military — such as education, scientific research and border security. The caps would not actually reduce spending, but aim to make it grow more slowly than inflation and the economy. This arrangement lets both sides claim a win of sorts: Republicans can call it a spending cut, since spending will grow more slowly than it might have otherwise. And Democrats can say they prevented actual cuts.
The deal would also claw back some of the funds previously allocated to the Internal Revenue Service to crack down on rich tax cheats. Under the deal, some of the I.R.S. funds could be used to mitigate other spending cuts. That reflects the bipartisan nature of the talks, with both sides getting wins: Republicans get to claim they successfully cut I.R.S. funding, and Democrats get to use the money to soften other cuts they never wanted.
Similarly, the permitting reforms in the deal could enable more clean energy projects, a Democratic priority, but also more oil and gas projects, which Republicans favor.
One last hurdle
The big question now: Will the deal pass? The right flank of the House Republicans has a big say. Those lawmakers have a history of doing everything they can to block spending deals they disapprove of. They could do so again, and they have sufficient power to kill the deal because McCarthy has only a nine-vote majority.
McCarthy has tried to avoid a mutiny by involving some of the most conservative members in debt limit talks and putting them in leadership positions. But there is no guarantee they stick with him — especially if they believe he went too far in his concessions to the White House.
There are two leading scenarios. In one, far-right Republicans vote against the deal but let it pass, and McCarthy secures the needed votes from Democratic lawmakers willing to back his compromise legislation with Biden. That result would be a vindication for McCarthy’s approach to the speakership: By bringing his most conservative members into the fold, he’ll have stopped them from taking more drastic action.
In the other scenario, far-right Republicans essentially tank the agreement. They could call a vote on whether to oust McCarthy as speaker and, because House Republicans have such a narrow majority, McCarthy could lose. (Remember: It took McCarthy 15 ballots to win the speakership in the first place.)
Conservative Republicans might stop short of such a step to avoid being blamed for the aftermath, said my colleague Carl Hulse, The Times’s chief Washington correspondent. If the federal government defaults on its debts and economic catastrophe follows, it will be clear that the hard right allowed this to happen by blocking a deal that a majority of lawmakers were ready to pass.
With that scenario in mind, conservative Republicans may let a deal go through even as they vote against it.
(REP): We have stopped runaway spending and over the next two years the national debt will only go up two trillion instead of three trillion even though tax receipts will set records every quarter.
(DEM): Draconian cuts! People will Die!
Taxpayers (the fewer and fewer who actually pay net taxes and more and more of them): STFU, STFU…just STFU!
I expect mortgage rates to go up as the issue of bonds starts again and unless fed starts buying them again its hard to see how rates will come down.
Wont be surprised to see 8% mortgage rates within a year.
There will be a point where the mortgage companies put themselves out of business. Their pricing division will insist that they can only fund 7-8% mortgages but none are coming in.
In so many words the Government asked for a credit line increase and Congress most likely will vote yes.