If you’re new here, our goal is simple: provide a 30,000-foot view of what’s happening in mortgage rates and the broader economy — without the noise.
📊 Rate Snapshot
30-year fixed mortgage rate: Flat week-over-week (no change since Tuesday, February 17th).
While markets moved beneath the surface, mortgage rates held steady overall.
Inflation: Still Above Target
Last week’s biggest headline came from the Fed’s preferred inflation gauge — the Personal Consumption Expenditures (PCE) Index.
- Headline PCE: +0.4% month-over-month
- Annual PCE: 2.9%
- Core PCE (excluding food & energy): +0.4% monthly, 3.0% annually
- Streaming services saw a notable 19.5% price increase, contributing to pressure.
Inflation remains above the Federal Reserve’s 2% target. That keeps the Fed cautious when it comes to cutting rates. Remember: part of the Fed’s dual mandate is price stability — controlling inflation is priority number one.
The good news? As stronger early-2025 inflation readings roll off the annual comparison, we could see year-over-year numbers gradually improve.
🏡 Housing Market: Mixed Momentum
Pending Home Sales
- Down 0.8% month-over-month
- Down 0.4% year-over-year
- Winter storms likely slowed activity in the South and Northeast
- West and Midwest regions saw increases
- Lower mortgage rates month-over-month could bring an estimated 550,000 additional buyers into the market
Buyer demand remains sensitive to rate movement. Even modest improvements can unlock sidelined demand.
Housing Construction
- Housing Starts: +6.2% to a 1.404M annual pace (still 7.3% lower year-over-year)
- Building Permits: +4.3% to 1.448M annual pace
- Builder Confidence (HMI): 36 (below 50 signals poor conditions)
Affordability challenges and construction costs remain obstacles. Limited supply growth continues to prevent inventory from flooding the market, which keeps competition relatively firm.
📉 Broader Economy: Cooling, Not Cracking
- Q4 2025 GDP: 1.4% annualized growth (down from 4.4% in Q3)
- Initial Jobless Claims: 206,000
- Continuing Claims: 1.869 million (suggesting longer job searches)
Economic growth slowed notably in Q4, partly due to reduced government spending. The labor market is gradually cooling — not collapsing — but showing signs of softening beneath the surface.
🔎 What’s Ahead This Week
Markets will focus on:
- Home Price Data (Tuesday)
- Jobless Claims (Thursday)
- January Producer Price Index (Friday)
These reports will provide fresh insight into housing trends, labor conditions, and wholesale inflation — all key drivers for mortgage rates.
Bottom Line
Mortgage rates held steady last week, but inflation remains above target and economic growth is slowing. Housing supply is still tight, builders are cautious, and buyer activity remains rate-sensitive.
As always, if you’re thinking about buying, refinancing, or just want to understand how these trends affect you, we’re here to help.
