After dropping significantly last week, mortgage rates rose due to stability in the stock and bond markets. Yesterday, mortgage rates improved because of the July CPI (inflation) report indicating a decrease in inflation, which can signal the Fed to cut the Fed rate sooner. The July CPI inflation rate dropped to 2.9%, below the expected 3.0%, and Core CPI inflation fell to 3.2%, meeting the expected 3.2%.

However, yesterday’s gains from the CPI report were wiped out today, as July Retail Sales came in at 1%, higher than the expected .3%. Additionally, the weekly jobless numbers were lower than expected, suggesting that the economy may still be strong, potentially leading to higher inflation and signaling to the Fed not to cut rates as aggressively.

Market expectations have shifted towards more anticipated cuts due to economic weakness. Interest rate futures are now pricing 8 Fed rate cuts over the next 12 months.

The national average 30-year mortgage rate today is 6.58%.