Consumer Sentiment slips. Refinance applications ramped up in December. Tax cuts should hit American’s wallets soon.

Consumer Sentiment edged lower in early January down from the decade high hit back in October. The index fell to 94.4 after the 95.9 recorded in December. However, consumers reported persistent strength in personal finances and buying plans. The report also revealed that 34% of consumers talked of tax reform with 70% of those saying the new tax reform bill would be positive while 18% said negative.

Leading cloud-based platform provider for the mortgage industry, Ellie Mae, reported this week that refinance applications made up 40% of all closed loans in December. The surge in refinancing was due in part to purchases being down in the winter months and would-be borrowers wanting to close before the new tax laws took effect. “As we closed out 2017 we saw an increase in the percentage of refinances due to seasonality as fewer purchases take place in the fourth quarter, and likely homebuyers were taking advantage of the mortgage deductibility limit before it decreased to $750,000 on December 15th,” said Jonathan Corr, president and CEO of Ellie Mae.

The new Tax Cut and Jobs Act bill should see Americans money taxed at lower rates starting February 1. Corporations are steadily increasing wages, giving bonuses, upping 401K contributions and hiring anyone they can. This is all powerful for housing. With consumer confidence already the highest in this century, that number should grow as tax reform actually starts to hit the wallets of America.