The average 30-year fixed rate mortgage was 6.57% yesterday, unchanged since the day before. The 15-year fixed mortgage rate stood at 5.51%, the same as one the day before. The 30-year FHA mortgage averaged 5.86% yesterday, having stayed the same. Meanwhile, the 30-year jumbo mortgage rate was 6.7%, reflecting no change.
The bigger picture
Inflation
For many years, nobody took much notice of inflation data. Month after month, year after year, reports showed prices rising gently, close to the Federal Reserve's target of 2% annually.
Then prices shot up during the pandemic as blockages and bottlenecks in the global supply chain shocked consumers with their impact on shopping bills. And, for a while, the consumer price index (CPI) overtook the jobs report as the most consequential monthly data. Over the last couple of years, the jobs report has regained its prominence.
But now things are changing again. And, for at least the rest of this year, CPIs and personal consumption expenditures (PCE) price indices might again affect markets and mortgage rates more than any other data.
How come? Well, many economists still believe that tariffs, higher deficits, mass deportations, and a plunging dollar will almost inevitably lead to higher prices.
Some others disagree. But the overwhelming narrative in the financial media is that, absent policy changes, inflation will soon rise yet further, possibly eventually reaching pandemic-era levels. We need not remind you of how unreliable all economic forecasts are.
So, any appreciable rise in tomorrow's July CPI could have a significant impact on markets and mortgage rates, sending the latter higher. Conversely, a fall in the CPI could push those rates lower.
Tomorrow's report might also affect a Federal Reserve decision, due Sep. 17, about cutting general interest rates. Right now, the CME FedWatch tool puts the chances of a modest rate cut that day at 88.4%, a result of a bad jobs report. But if tomorrow's CPI suggests prices are beginning to rise significantly, it could slash that probability.
On Thursday, we're due the producer price index (PPI), the CPI's kid brother, and on Friday, the import price index (IPI), the baby of the family. Neither of these is typically anything like as influential as their big sister, the CPI.
But the PPI and IPI measure price changes earlier in the supply chain, which in current circumstances might increase their importance as predictors of future CPIs. So, take all this week's inflation data seriously.
Retail sales
Friday brings July retail sales data. You could argue that, in the hierarchy of economic reports, this comes third after employment and inflation figures.
Why? "Consumer expenditures account for approximately two-thirds of U.S. economic activity," according to U.S. Bank.
Higher-than-expected spending tends to push mortgage rates upward, while lower-than-expected sales figures tend to drag them downward.
Also on Friday, we're due the first reading of consumer sentiment in August. That is an indicator of future consumer expenditures, and might affect mortgage rates, too.
Mortgage Rate Trends: Past 90 Days
Purchase Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.57% | 6.6% | +0% | -0.11% |
| 15-Year Fixed | 5.51% | 5.56% | +0% | -0.17% |
| 30-Year Fixed FHA | 5.86% | 7.06% | +0% | -0.08% |
| 30-Year Fixed VA | 5.94% | 6.09% | +0% | -0.11% |
| 30-Year Fixed USDA | 5.83% | 5.97% | +0% | -0.15% |
| 30-Year Fixed Jumbo | 6.7% | 6.73% | +0% | -0.25% |
| 5/6 Year ARM | 6.51% | 6.55% | +0% | -0.21% |
Refinance Rates
| Loan Type | Rate | APR | Daily Change | Monthly Change |
|---|---|---|---|---|
| 30-Year Fixed | 6.62% | 6.64% | +0% | -0.15% |
| 15-Year Fixed | 5.51% | 5.56% | +0% | -0.15% |
| 30-Year Fixed FHA | 5.83% | 7.04% | +0% | -0.09% |
| 30-Year Fixed VA | 5.97% | 6.11% | +0% | -0.14% |
| 5/6 Year ARM | 6.56% | 6.59% | +0% | -0.26% |
Coming up
Although economic reports are usually the main drivers of changes to mortgage rates, they're not the only ones. The general mood in markets and economically consequential news can also affect those rates. News items concerning tariffs and deficit funding are especially influential at the moment.
Mortgage rates today
There are no reports on today's MarketWatch economic calendar. That just might turn out to be the calm before tomorrow's storm.
We'll brief you tomorrow morning on the CPI, hours before it's published at 8:30 a.m. Eastern. And, later in the week, on all the other key reports on the following days' schedules.
