An in-line CPI report released this morning means mortgage rates should continue to avoid going much higher.
At the same time, they seem to be enjoying little relief when the good news does arrive.
Which kind of speaks to them being further entrenched at these levels, and also in need of a deal with Iran to really experience positive movement.
That means it’s likely going to be more of the same high-6s for the 30-year fixed until something material changes.
But it could have been a lot worse if inflation increased more than expected.
Mortgage Rates Ease as Inflation Cooperates
It wasn’t a cold inflation report, but it also wasn’t a hot one either.
Simply put, July’s CPI report matched the consensus forecast, with prices up 0.1% during the month and 0.2% when you strip out volatile food and energy (core CPI).
For the year, prices were up 3.4% and 2.5%, respectively, both slight improvements from the prior month.
However, inflation continues to remain above the Fed’s 2% target, putting pressure on Fed chair Kevin Warsh and company to act.
And it’s been above target since March 2021 as the pandemic roiled the global economy.
That means an in-line report, despite being above the Fed’s mandate, might be enough for them to hold steady.
Many expected a Fed rate hike in September, but if the data keeps cooperating, they could opt to stay put instead.
Those Fed rate expectations could serve as a tailwind for mortgage rates and allow them to trickle lower instead of continuing to rise toward 7% again.
Upward Pressure Remains on Mortgage Rates Without a Deal
Both the monthly jobs report being cool last month and this CPI report coming in at consensus have helped mortgage rates avoid getting worse.
And that’s kind of the rub recently. You’ll notice that mortgage rates haven’t experienced any major relief lately.
These reports coming in cooler-than-expected or at forecast have simply kept mortgage rates from getting worse.
That tells me there’s more upward pressure than downward pressure on mortgage rates currently.
The trend is decidedly higher instead of lower, likely driven by the conflict with Iran that remains unsettled.
Just yesterday there were fresh attacks on ships in the Gulf of Oman and Red Sea as key oil thoroughfares remain risky to navigate.
It’s not just the Strait of Hormuz, creating urgency to strike a deal before a precedent is set that tolls must be paid instead.
Until this gets resolved, it’s hard to imagine bond yields and mortgage rates coming down by any significant margin.
Not a Loss, But Also Not Much of a Win for Mortgage Rates
Perhaps the best way to characterize today’s CPI report is that it wasn’t a loss, but it’s also not much of a win.
It keeps mortgage rates at bay, and avoids things deteriorating further, but it’s not some sort of victory either.
Judging upon the movement of the 10-year bond yield, which moves in lockstep with 30-year fixed mortgage rates, today’s mortgage rate movement will be muted as well.
They could tick down a few basis points, but that would still put them around 6.75%.
That’s just an eighth of a percent or less above the 52-week highs and rates remain about 0.25% above their year-ago levels.
So sure, you can focus on the silver lining, that the Fed might not have to hike in September.
That might mean we continue to avoid 7-handle rates. But without a deal, it’ll be hard to get back to the low 6s again too.
And the longer this persists, the more mortgage rates seem to be getting entrenched at these higher levels.
- In-Line CPI Report Takes Pressure Off Mortgage Rates, But Major Relief Still Elusive - August 12, 2026
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- Mortgage Rates Catch a Break as Job Growth Goes Negative - August 7, 2026