Mortgage Rates

The Trade Balance has offered little new insight, as it has largely returned to levels seen prior to the earlier period of unstable tariff policies. Consumer Credit had been trending upward nearly every month; however, this latest report breaks that pattern by showing a decline in consumer credit usage. Meanwhile, the Fed’s Minutes revealed nothing particularly substantial, instead reflecting a dovish stance and a willingness to maintain current interest rates for the foreseeable future.

Consumer Credit
Total US consumer credit fell by $0.18 billion in May 2026, following an upwardly revised $20.82 billion increase in April and missing market expectations for a $17.1 billion gain. Revolving credit, which includes credit card debt, declined to $1.34 trillion from $1.35 trillion, pointing to weaker short-term consumer borrowing. Meanwhile, non-revolving credit, which includes auto and student loans, increased to $3.81 trillion from $3.80 trillion. Overall consumer credit was unchanged on an annualized, seasonally adjusted basis, as revolving credit contracted at a 4.7% annual rate while non-revolving credit grew at a 1.6% pace.

U.S. Trade Balance
The US trade deficit widened sharply to $77.6 billion in May 2026 from a revised $54.6 billion in April, broadly in line with market expectations of a $78.5 billion shortfall. The gap was the largest since March 2025, as imports climbed 3.3% to $395.3 billion, their highest level in more than a year. The increase was driven primarily by higher purchases of consumer goods, particularly pharmaceutical preparations and cell phones, as well as crude oil and passenger cars. 

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.03%, bringing the current rate to 5.82%.
• 30-Year FRM rates saw an increase of 0.06%, bringing the current rate to 6.49%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.04%, with current rate at 6.21%.
• 30-Year VA rates saw an increase of 0.04%, with current rate at 6.23%.

Jobless Claims
Initial Claims were reported to be 215,000 compared to the expected claims of 218,000. The previous landed at 217,000.

What’s Ahead
Next week brings the release of the Consumer Price Index (CPI) and Producer Price Index (PPI) inflation reports. Although inflation remains an important indicator, these reports are not expected to significantly alter the Federal Reserve’s current stance on interest rates.

Unemployment data has shown some rather interesting statistics, with the lowest unemployment rates in the last 14 months being reported. Looking closer at the statistics shows that the unemployment rate hasn’t just dropped due to more people finding work, but also because a significant number of people have stopped looking for work, causing the numbers to appear more favorable.

Among analysts, this is a pretty standout example, and currently, the Federal Reserve has made no indication that it plans to change its policies on interest rates, with many members of the board still favoring increasing rates again. Hourly wages have also seen a modest increase, but this growth has been overshadowed by the increase in inflation for quite some time.

Unemployment Report
The unemployment rate fell in June to a 14-month low of 4.2%. Good news, right? Yes and no. The biggest reason the jobless rate fell is that 720,000 people dropped out of the labor force. This is usually a bad sign, as it means people are too discouraged to look for work.

Consumer Confidence
Consumer Confidence Index rose 0.6 point to 91.2 in June, a figure that is still below its year-ago reading of 95.2. Consumer attitudes worsened after the Iran war caused oil and gas prices to spike, accelerating inflation and causing Americans’ inflation-adjusted incomes to decline. Before the pandemic, the index regularly topped 120.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.05%, bringing the current rate to 5.79%.
• 30-Year FRM rates saw a decrease of -0.06%, bringing the current rate to 6.43%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.07%, with current rate at 6.17%.
• 30-Year VA rates saw an increase of 0.07%, with current rate at 6.19%.

Jobless Claims
Initial Claims were reported to be 215,000 compared to the expected claims of 220,000. The previous week landed at 216,000.

What’s Ahead
A very light week lies ahead, with key economic updates including the U.S. Trade Balance and Consumer Credit reports, along with the Fed’s FOMC Meeting Minutes.

The latest Personal Consumption Expenditures (PCE) Price Index, the Federal Reserve’s preferred measure of inflation, has been released. The report indicates that inflation remains elevated across most sectors, although the overall reading came in slightly below expectations.

However, this encouraging development has been tempered by a decline in consumer sentiment, which has fallen for the fourth consecutive month. Much of the pessimism has been attributed to concerns surrounding the conflict in Iran and rising fuel costs.

Despite inflation coming in below forecasts, some members of the Federal Reserve have continued to discuss the possibility of raising interest rates further in an effort to keep inflation under control.

PCE Index
The core personal consumption expenditures price index showed a 3.4% annual rate after rising 0.3% for the month. The core annual reading was the highest since October 2023. The Fed’s primary inflation gauge also showed an annual rate of 4.1%, the highest since April 2023.

Consumer Sentinment
Consumer sentiment has tumbled to a fresh record low in May as fears of higher prices grow due to the U.S.-Iran war and elevated oil prices, the University of Michigan’s Surveys of Consumers said Friday.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.03%, bringing the current rate to 5.84%.
• 30-Year FRM rates saw an increase of 0.02%, bringing the current rate to 6.49%.

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.08%, with current rate at 6.07%.
• 30-Year VA rates saw a decrease of -0.08%, with current rate at 6.09%.

Jobless Claims
Initial Claims were reported to be 215,000 compared to the expected claims of 223,000. The previous week landed at 227,000.

What’s Ahead
Key releases to watch next week include the U.S. Employment Report, U.S. wage data, and the Consumer Confidence report.