The Senate is expected to consider the bipartisan budget deal struck in recent weeks, with policy analysts expecting a vote by the end of this week.
Still lacking the "votes necessary for passage in the Senate," policy analysts with Compass Point Research & Trading Group say the budget is still likely to get the support of lawmakers, solving at least one of the fiscal headwinds impacting the economy and indirectly the housing market.
The week ahead is an important one for housing, with the Federal Open Market Committee expected to meet and make an announcement on Wednesday, Compass Point said.
While some analysts expect the Fed’s purchases of Treasurys and mortgage-backed securities to continue at least until March, other market observers say a taper announcement this week is not entirely off the radar.
The National Association of Home Builders housing index measuring builder sentiment also hits the wires Tuesday, followed by housing starts on Wednesday and existing home sales on Thursday.
One area that is likely to be cleared up by next week is the Senate confirmation of Ben Bernanke's replacement, Janet Yellen, to lead the Federal Reserve as chairman. With the Senate recessing by the end of this week, Yellen’s confirmation is expected to be in the mix in the coming days, Compass Point noted.
But even with the budget debate closer to a resolution, Compass Point says another round of fiscal fights could surface over the next debt-limit fight. The technical deadline for the next debt ceiling is Feb. 7, 2014, the research firm added. Statements made by House Budget Committee Chair Paul Ryan, R-Wis., suggest the next round of debt-ceiling fights will include more negotiations.
"We as a caucus — along with our Senate counterparts — are going to meet and discuss what it is we’re going to want out of the debt limit…We don’t want nothing out of this debt limit. We’re going to decide what it is we’re going to accomplish out of this debt limit fight," Compass Point quotes Rep. Paul Ryan as saying.