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Mortgage rates hinge on inflation worries as Fed stays on hold
Recent U.S. employment data showed strong job growth but weak hiring, while the Mortgage Bankers Association raised its rate outlook and trimmed 2026 volume and unit forecasts.
Mortgage rate expectations remain tied to inflation concerns, with housing coverage noting that the Federal Reserve is likely to hold rates at its September and October meetings based on the current data path, including that October comes shortly before the mid-term election.
The discussion points to recent U.S. employment data as mixed, citing strong job growth but a low hiring rate and hiring concentrated in restaurants, bars, and health care, factors that are being weighed against inflation driven rate worries.
Mortgage Bankers Association guidance cited in the update shows lenders looking ahead by moving mortgage rate predictions higher, lifting rate expectations while reducing 2026 volume and unit forecasts and indicating 2027 is expected to be close to this year’s production.
Alongside the macro picture, the update highlights lender activity, including NEO Home Loans creating an assessment for mortgage professionals to help them better understand origination opportunities, with the firm saying more than 500 mortgage professionals have taken the assessment so far.