Mortgage rates slip to three-week low as inflation data eases concerns
Mortgage rates fell to their lowest level in three weeks after the Labor Department reported a modest slowdown in inflation, reviving hopes the Fed will pause rate hikes in September.
On Thursday, mortgage rates retreated to a three-week trough as Treasury yields kept falling, with the average 30-year rate slipping to 6.67%, according to Freddie Mac data. The movement was sparked by a Bureau of Labor Statistics release indicating a slight cooling of June inflation, bolstering expectations that the Federal Reserve will hold rates steady at its September 16 policy meeting. Analysts at Oxford Economics anticipate a similar modest decline in July's personal consumption expenditures report, the Fed's preferred gauge.
Mortgage loan applications climbed 3.6% on a seasonally adjusted basis, driven by both purchase and refinance demand, though the overall pace remains below last year’s levels. Industry voices such as Joel Kan and Sarah DeFlorio noted the temporary nature of the relief, pointing to the ongoing Iran-related tensions and oil price volatility as lingering risks to inflation and rates. The market will watch for a definitive settlement in the Strait of Hormuz to gauge longer-term rate trajectories.
Why it matters
Lower mortgage rates can reduce borrowing costs for homebuyers and influence the broader housing market.
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