Mortgage Rates

Expectations that the Federal Reserve would raise rates to combat significant inflation have come to pass, with a modest 0.25% increase in the rate. The Federal Reserve has stated that it remains committed to restoring inflation to its 2.0% target, which will likely include further rate increases in the future. The rest of the week featured a light economic calendar with very few impactful releases, leaving the Federal Reserve’s rate decision as the primary driver of market activity.

FOMC Rate Decision
At its September 15–16, 2026 FOMC meeting, the Federal Reserve raised the federal funds target range by 25 basis points, from 3.50%–3.75% to 3.75%–4.00%. This was the Fed’s first rate increase since July 2023.

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.17%, bringing the current rate to 6.26%.
• 30-Year FRM rates saw an increase of 0.19%, bringing the current rate to 6.95%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.13%, with current rate at 6.81%.
• 30-Year VA rates saw an increase of 0.12%, with current rate at 6.82%.

Jobless Claims
Initial Claims were reported to be 198,000 compared to the expected claims of 208,000. The previous week landed at 206,000.

What’s Ahead
Another light week lies ahead. The notable reports will be the Federal Reserve’s balance sheet and M2 Money Supply data releases. These reports can provide valuable insight into changes in liquidity and the broader money supply, both of which can influence inflation and overall economic conditions.

While CPI data has come in within expectations for current inflation, inflation remains much higher than in previous years. The rate is holding steady at 2.4%, which is above the Federal Reserve’s 2.0% target. 

There are sectors where cost has seen significant increase and has not been reflected in the CPI due to the more recent changes implemented by the Trump administration. Fuel costs, for example, have seen an upward year-over-year trend that has been exacerbated by the recent war in Iran.

The Fed Beige Book and balance sheet have also shown steady growth and an upward trend as of late. Despite inflation data running counter to this idea, there are still widespread expectations that rates will be cut again.

Consumer Price Index
Consumer prices increased 0.4% in August, while core CPI rose 0.3%. Annual inflation remained at 3.4%, with core inflation easing to 2.4%. While underlying inflation continues to move closer to the Federal Reserve’s 2% target, the monthly increase suggests that inflationary pressures remain persistent.

Producer Price Index
Producer prices increased 0.4% in August, while prices for goods rose 1.1% and services increased 0.1%. Producer prices were up 5.4% from a year ago, indicating continued wholesale inflation pressure. Core PPI, excluding food and energy, increased 0.2% for the month and 4.6% year over year. The stronger headline reading could make the Federal Reserve more cautious about future rate cuts, potentially putting upward pressure on mortgage rates. 

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.05%, bringing the current rate to 6.09%.
• 30-Year FRM rates saw an increase of 0.05%, bringing the current rate to 6.76%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.24%, with current rate at 6.68%.
• 30-Year VA rates saw an increase of 0.24%, with current rate at 6.70%.

Jobless Claims
Initial Claims were reported to be 206,000 compared to the expected claims of 200,000. The previous week landed at 209,000.

What’s Ahead
FOMC is holding an economics projection meeting which should provide forward guidance on policy. Additionally, the Federal Reserve Interest Rate decision happening mid-week, making for a very light week.

The Non-farm Payroll figures are a strong indicator of the job market and showed a notable increase this quarter. However, this doesn’t necessarily indicate a significant shift in the job market as a whole, as certain sectors have experienced outsized impacts compared to others. JOLTs job openings data does support the increase in openings seen over the last quarter, though it is not among the largest indicators on the broader economic scale.

Non-farm Payrolls
The +162,000 jobs was considerably stronger than the 31,000 average monthly gain over the preceding 12 months. Food services added 59K and local-government education added 42K, while information employment fell 23K.

JOLTs Job Openings
The number of job openings was little changed at 7.3 million in July, the U.S. Bureau of Labor Statistics reported today. Hires and total separations both changed little at 5.1 million. Within separations, quits (3.1 million) and layoffs and discharges (1.7 million) were little changed. 

Primary Mortgage Market Survey Index

• 15-Year FRM rates saw an increase of 0.06%, bringing the current rate to 6.04%.
• 30-Year FRM rates saw an increase of 0.05%, bringing the current rate to 6.71%.

MND Rate Index

• 30-Year FHA rates saw an increase of 0.07%, with current rate at 6.44%.
• 30-Year VA rates saw an increase of 0.09%, with current rate at 6.46%.

Jobless Claims
Initial Claims were reported to be 200,000 compared to the expected claims of 209,000. The previous week landed at 215,000.

What’s Ahead
PPI and CPI inflation data are set to be released mid-week, along with other notable economic releases, including the Federal Reserve Balance Sheet and Consumer Credit data.