Last Week's Mortgage Rate Recap: Rates moved higher 👎
Unfortunately our forecast for last week was correct, rates moved higher for the week after dropping more than expected when markets overreacted to the previous week's weak jobs data. The good news was that the moves higher weren't large and rates are still better than in July.
This Week's Mortgage Rate Forecast: Rates could improve 👍
After moving higher last week, rates could settle down and even improve a little bit if this week's inflation data shows inflation is still cooling, because it would support the Fed cutting policy rates at the September meeting. Mortgage rates will move lower in anticipation of future Fed rate cuts.
What's affecting rates this week:
- Inflation data: Wholesale inflation data on Tuesday will have some effect on rates this week, but it is Wednesday's consumer inflation data that will cause the biggest moves. Consumer inflation is expected to be slightly higher month-to-month than last month's readings, but should still be showing year-over-year inflation at a slower pace which would help mortgage rates move at least slightly lower.
- Fed rate cuts: Markets are now pricing in smaller policy rate cuts to start in September, after overreacting the previous week.