A breakthrough this week in the trade deal with China as reports say President Trump and China have agreed on a phase one deal to cut tariffs in half in exchange for China purchasing more U.S. agricultural goods. CNBC's sources said that Trump had agreed to cut tariffs by 50% on $360 billion worth of Chinese goods in an agreement in principle. However, Friday morning saw another wrinkle as President Trump tweeted that a report on the trade deal was "completely wrong." 

The Chinese government held a press conference Friday morning to address the trade deal. Officials with the State Council Information Office said in that press conference they have agreed in text to the deal, the only thing left is to sign it. The trade-off would be that China would agree to purchase more U.S. agricultural products.

Markets jumped at the news Thursday afternoon and continued to climb Friday with stocks nearing record territory once again. Once the press briefing started, the Dow jumped by 100 points with all major averages hitting record highs. The 10-year Treasury yield neared 2% Thursday evening but dropped back down to 1.884% early Friday. Mortgage rates typically trend 2% above the 10-year Treasury yield.

Fed holding steady

The Federal Reserve Open Market Committee members voted at their meeting this week to keep interest rates unchanged at 1.50% to 1.75%. Barring any unforeseen economic windfalls, the Fed members expect to keep rates steady through 2020. 

Fed chairman Jerome Powell continues his stance of a solid, still growing economy with the trade deal with China the main question mark. Powell added that the FOMC will need to see a significant move in inflation before considering raising interest rates.

Brexit scheduled for Jan. 31

Will we finally see Brexit come to fruition? United Kingdom Prime Minister Boris Johnson's Conservative party won in a landslide victory this week and will retain power.  

Not long after the vote on Thursday, Johnson announced that the country will leave the European Union on Jan. 31. The initial Brexit referendum happened in June 2016. The election with the Brexit date did send a positive ripple through European markets. 

The issue of inventory

New data from Realtor.com shows that housing inventory dropped nearly 10% from November 2018 to November 2019, with the most significant decrease in inventory shown in homes priced under $200,000. Those typical "starter-homes" saw inventory drop by 16.5%. 

In its article, Realtor.com notes that it wasn't just lower-priced homes that were affected, rather inventory dropped across the board. "Mid-tier inventory priced between $200,000 and $750,000 also decreased by 7.4% year-over-year compared to October's year-over-year drop of 4.3%, while high-end inventory priced above $1 million decreased by 1.7% year-over-year, compared to October's year-over-year increase of 1.3%."

Currently, interest rates are staying under 3.8% on average, with Freddie Mac's 30-year fixed-rate mortgage average at 3.73% this week. Remember, there are many factors that affect your rates including credit score, amount of debt and type of loan.