Mortgage Rates

The latest FOMC minutes reinforced the Federal Reserve’s continued focus on price stability, with policymakers voting to maintain the current federal funds rate for the time being. However, the path forward remains uncertain, particularly as persistent inflation continues to complicate the case for additional rate cuts. In fact, several policymakers have indicated greater concern about inflation and favored tighter monetary policy at the most recent meeting.

With the more recent departure of former Fed Chair Jerome Powell, there is a lot of uncertainty about where the Federal Reserve will move under the current administration. There is also a lot of speculation about further interest rate cuts, although such cuts may be difficult to justify given current inflation rates. Leading economic indicators have shown positive results, suggesting that the economy is growing, but many sectors are still hurting, with employment conditions weaker in some areas.

Leading Economic Indicators
The Conference Board Leading Economic Index (LEI) for the US increased by 0.2% in July 2026 to 99.5, after an upwardly revised decline of 0.1% in June. As a result, the LEI’s six-month growth rate turned positive, to an increase of 0.2% between January and July 2026, a sharp reversal from its 1.3% contraction over the previous six months.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.01%, bringing the current rate to 5.95%.
• 30-Year FRM rates saw a decrease of -0.02%, bringing the current rate to 6.65%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.04%, with current rate at 6.33%.
• 30-Year VA rates saw an increase of 0.04%, with current rate at 6.35%.

Jobless Claims
Initial Claims were reported to be 210,000 compared to the expected claims of 205,000. The previous week landed at 200,000.

What’s Ahead
PCE Index coming up this week as the leading inflation report for the Federal Reserve.

Both the Consumer Price Index (CPI) and Producer Price Index (PPI) reported figures that were either entirely in line with expectations or just slightly below them. This does not set any new precedent for the potential of a rate increase from the Federal Reserve, as inflation is still rising, just at a largely expected rate.

Retail sales have also shown signs of a slump compared to previous quarters, with gas prices and Amazon Prime Day among the primary culprits. This isn’t necessarily a broader indicator of overall economic health, but there is certainly pressure being felt from persistent inflation across both consumer and manufacturing sectors.

Consumer Price Index
CPI increased 0.1% m/m (3.4% y/y) following a 0.4% monthly decline in June. The core index rose 0.2% after having been unchanged in June. The Action Economics Forecast Survey expected a 0.1% monthly gain for the headline index and a 0.2% monthly increase for the core index. The 3-month rate for the headline index fell to 0.5% annualized in July from 2.8% in June while the 3-month rate for the core index slipped to 1.6% from 2.3% in June.

Producer Price Index
The producer price index, a measure of underlying inflation pressures, was unchanged for the month, below the 0.2% Dow Jones consensus estimate and after falling 0.1% in June. The June figure was revised from a previously reported decline of 0.3%. Excluding food and energy, the core PPI rose 0.2%, against the forecast for a 0.3% gain. The core PPI excluding trade services increased 0.4%.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.05%, bringing the current rate to 5.96%.
• 30-Year FRM rates saw a decrease of -0.02%, bringing the current rate to 6.67%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.01%, with current rate at 6.29%.
• 30-Year VA rates saw an increase of 0.01%, with current rate at 6.31%.

Jobless Claims
Initial Claims were reported to be 209,000 compared to the expected claims of 204,000. The previous week landed at 199,000.

What’s Ahead
A very light release week proceeding the inflation data, with only the economic leading indicators having any outsized influence.

While unemployment rates have fallen to their lowest levels since 2025, they have not fallen for the right reasons. Many people who have dropped out of the labor force have also stopped looking for work, which can skew the unemployment numbers. This has been followed by a smaller-than-expected increase in hourly pay, which has continued to lag behind inflation, especially in the current environment.

This weakness has also been reflected in a reduction in overall payrolls, indicating an overall decline in employment. As a result, these labor market conditions could make the Federal Reserve more hesitant to raise rates.

U.S. Employment Rate
The U.S. unemployment rate fell for the second month in a row, to 4.1%, a level it last reached in June 2025. Ordinarily that would be good news. This time it wasn’t. The unemployment rate declined because 264,000 people dropped out of the labor force. In other words, they stopped looking for work.

Payroll
Economists surveyed by Bloomberg had expected a gain of 80,000 positions, an improvement from June’s revised addition of 20,000 jobs. Those predictions were dashed as leisure and hospitality dropped 40,000 roles as the World Cup wound down and local government positions fell by 57,000. Retailers also axed jobs. 

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw a decrease of -0.03%, bringing the current rate to 6.01%.
• 30-Year FRM rates saw an increase of 0.03%, bringing the current rate to 6.69%.

MND Rate Index

• 30-Year FHA rates saw a decrease of -0.06%, with current rate at 6.28%.
• 30-Year VA rates saw a decrease of -0.06%, with current rate at 6.30%.

Jobless Claims
Initial Claims were reported to be 199,000 compared to the expected claims of 204,000. The previous week landed at 198,000.

What’s Ahead
CPI and PPI inflation data will be released this week, while Consumer Sentiment and Retail Sales reports will provide a clearer picture of the overall economic outlook.