Each week we take a step back to provide a 30,000-foot view of mortgage rate activity and the economic trends shaping the housing market. Over the past week, several key economic indicators—from inflation data to housing activity—have helped shape the outlook for mortgage rates.
Weekly Rate Movement
Since Monday, March 9th, the 30-year fixed mortgage rate increased by approximately 0.25% week-over-week.
While inflation readings remained relatively subdued overall, rising oil prices have created renewed inflation concerns in financial markets. Higher energy costs can put upward pressure on inflation expectations, which in turn pushed bond yields and mortgage rates slightly higher.
At the same time, economic growth showed signs of slowing, with a downward revision to fourth-quarter GDP.
Key Economic Highlights from Last Week
Inflation Data Shows Gradual Cooling
Consumer prices rose 0.3% in February, bringing the annual inflation rate to 2.4%. Core inflation—which excludes food and energy—held at 2.5% year-over-year, marking the lowest annual level since March 2021.
A notable contributor to easing inflation pressures was a slowdown in rent growth, which has been one of the largest drivers of inflation over the past several years.
PCE Inflation Remains Elevated
The Personal Consumption Expenditures (PCE) index, the Federal Reserve’s preferred inflation measure, showed slightly stronger readings.
- Headline PCE inflation: 2.8% annually
- Core PCE inflation: 3.1% annually
While still trending lower compared to previous years, these readings remain above the Fed’s 2% inflation target, reinforcing the central bank’s cautious approach to future rate cuts.
Federal Reserve Outlook
The Federal Reserve continues to balance signs of a cooling labor market with inflation that remains somewhat sticky.
Despite rate cuts that occurred previously, policymakers appear likely to maintain a cautious stance moving forward. Markets widely expect the Fed to hold the benchmark Federal Funds Rate steady at its upcoming meeting.
Housing Market Updates
Existing Home Sales Improve
Existing home sales rose 1.7% in February, suggesting that buyers are responding to mortgage rates that remain lower than levels seen a year ago.
Housing inventory also improved:
- 1.29 million homes for sale
- 4.9% increase year-over-year
While supply remains historically tight, increased inventory may help improve affordability conditions as the spring buying season approaches.
Housing Construction Driven by Multi-Family Growth
Housing starts increased significantly last week, though the growth was driven entirely by multi-family construction, which jumped 30%.
Single-family construction declined and building permits fell, signaling that future housing supply growth may remain limited in the near term.
Economic Growth Slows
Fourth-quarter 2025 GDP was revised down to 0.7% annualized growth, a significant slowdown from the 4.3% growth recorded in Q3.
The revision was largely attributed to reduced government spending during the recent shutdown, highlighting how policy disruptions can temporarily weigh on economic output.
Labor Market Remains Stable
Despite broader economic slowing, labor market conditions remain relatively stable.
Recent data showed:
- Initial jobless claims: 213,000 (still historically low)
- Continuing claims: slightly declined
- Job openings: increased to 6.95 million
While these figures remain well below the 2022 peak above 12 million job openings, they indicate that the labor market continues to show resilience.
What to Watch This Week
Markets are closely monitoring several key developments that could influence mortgage rates in the days ahead.
Key items to watch include:
- The upcoming Federal Reserve meeting
- Pending home sales data
- New home sales reports
- Wholesale inflation readings
- Weekly jobless claims
Investors will also be watching oil prices and geopolitical developments, as continued increases in energy costs could create additional inflation pressures and impact interest rates.
As always, we will continue monitoring economic developments and housing trends to help provide insight into where mortgage rates may be headed next.
