Last week saw three housing market reports that surprised to the upside. Existing Home Sales shot up 5.6% in November, to a 5.81 million annual rate, their fastest sales pace since 2006. Demand stays strong (44% of homes sold in less than a month), though supply in many areas is tight. November New Home Sales exploded up 17.5% to a 733,000 annual rate, and are now up 26.6% the past year, to their highest rate in ten years. Housing Starts grew 3.3% in November, to a 1.297 million annual rate, up 12.9% for the year.

Builders are upbeat--the latest National Association of Home Builders confidence index is at its highest level since 1999. Friday, the President signed the Tax Cuts & Jobs Act. For homeowners, the capital gains exclusion on home sales, and the mortgage interest deduction on existing mortgages were left unchanged. But the interest deduction on new mortgages is only available up to $750,000 (down from $1 million), and all state and local tax deductions are capped at $10,000. As always, please check with a tax professional before making any tax-related decisions.

BUSINESS TIP OF THE WEEK... Plan for success in 2018. Write down your goals--revenue, number of prospects, clients, projects, new referral partners. Lay out these goals by month, quarter and for the year, then check your progress at the start of each month.

>> Review of Last Week

HOLIDAY CHEER... All anyone on Wall Street wanted from Santa were some tax cuts, and Friday morning the President obliged, signing into law the biggest tax code overhaul in more than thirty years. Its centerpiece is a cut in the corporate tax rate from 35% to 21%, plus cuts in individual tax rates.Critics of the bill say lower taxes will raise the deficit, supporters claim the boost in economic growth, jobs and wages resulting from the tax cuts will ultimately increase government revenues. Investors sided with the supporters, cheerfully sending all three major market indexes ahead for the week.

Even before the new tax cuts kick in on January 1, the economy keeps showing signs of decent growth. Last week we saw those impressive housing reports covered above. In addition, Personal Spending bumped up 0.6%, a key indicator, since 70% of the economy is driven by consumers. The Core PCE Prices index, the Fed's favorite inflation measure, is up 1.5% year-over-year, edging closer to the central bank's 2% long-run target. The University of Michigan Consumer Sentiment index remains up there, with its average of 96.8 for 2017, the highest since 2000.

The week ended with the Dow UP 0.4%, to 24754; the S&P 500 UP 0.3%, to 2683; and the Nasdaq UP 0.3%, to 6960.

Bonds edged lower as Friday's good economic data was capped with the blow-out New Home Sales report. The 30YR FNMA 4.0% bond we watch finished the week down .38, at $104.28. For the week ending December 21, Freddie Mac's Primary Mortgage Market Survey had national average 30-year fixed mortgage rates inching up. But their Deputy Chief Economist noted rates are "below...last year at this time." Remember, mortgage rates can be extremely volatile, so check with your mortgage professional for up-to-the-minute information.

DID YOU KNOW?... Freddie Mac's November 2017 Outlook says 2017 is on track to be the best year in housing in a decade, with 6.13 million home sales and 1.2 million housing starts..

>> This Week's Forecast

PENDING HOME SALES OFF, MIDWEST MANUFACTURING, CONSUMER CONFIDENCE GROW... Contract signings on existing homes measured by the Pending Home Sales index, are forecast to slip a bit in November after the prior month's strong gain. But Consumer Confidence and the Chicago PMI reads on factory activity in the Midwest are expected to continue showing strong expansion