Market Update - August 14, 2026

Friday, August 14, 2026

This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.

Rates are provided by Mortgage News Daily. The MND Rate Index is the best way to follow day-to-day movement in mortgage rates. The index is driven by real-time changes in actual lender rate sheets. This has two huge advantages, timeliness and accuracy. A "top tier" scenario is used as a baseline (75 LTV, 780 FICO, etc.). We use proprietary methodology to adjust the rate to account for points. ***That can mean that lenders are quoting 6.125 with points while our index is at 6.25, hypothetically.***

Market Commentary:

Mortgage rates remain elevated, with 30-year fixed rates averaging in the upper 6% range and continuing to face pressure from inflation concerns and higher Treasury yields. The Federal Reserve held rates steady at its July meeting but maintained a cautious, hawkish tone, signaling that inflation remains a concern and keeping markets alert for potential future rate increases. While inflation remains above the Fed's target, recent labor market data suggests the economy may be slowing, which could eventually support lower rates if that trend continues. For housing, affordability remains a challenge but rising inventory levels in many markets are creating more opportunities for buyers and reducing bidding-war activity.

Bottom Line: Rates are likely to remain volatile in the near term. Buyers waiting for lower rates should remember that declining rates could bring increased competition, while today's market offers more inventory and negotiating power than we've seen in recent years.

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A chart titled “A Quick Look Back,” summarizing key U.S. economic events from August 7 to August 13, 2026. The table includes Event Date, Event Name, Actual Data, Forecast, Previous Data, and Commentary. On August 7, the U.S. unemployment rate for July declined to 4.1%, below the forecast of 4.2% and down from June’s 4.2%. The decline was largely attributed to people leaving the labor force, while the total number of unemployed people fell to approximately 6.916 million. Also on August 7, Non-Farm Payrolls unexpectedly decreased by 23,000 jobs in July, significantly weaker than the forecast for an 80,000-job increase and below the previous reading of 57,000. Despite the decline in payrolls, the unemployment rate moved lower as labor force participation weakened. On August 11, Existing Home Sales for July declined 1.7% to a seasonally adjusted annual rate of 4.06 million units, slightly above the forecast of 4.05 million but below the previous 4.09 million. According to the National Association of Realtors, the national median existing-home price increased 2% from a year earlier to $434,100, while the inventory of unsold homes declined 1.9% to 1.54 million units. On August 12, the Core Consumer Price Index for July increased 0.2% month-over-month, matching economists’ expectations and rising from the previous month’s flat 0.0% reading. Core CPI, which excludes volatile food and energy prices, slowed to 2.5% on a 12-month basis, indicating continued moderation in underlying inflation. On August 13, Initial Jobless Claims for the week ending August 8 increased to 209,000, up from the previous week’s 199,000 and above the forecast of 202,000. The increase represented a rise of approximately 9,000 new claims and came in slightly higher than economists had expected. Overall, the week’s economic data presented a mixed picture, with weaker payroll growth and rising jobless claims pointing to some softening in the labor market, while a lower unemployment rate, moderating core inflation, and relatively stable existing-home sales offered additional signals about the direction of the U.S. economy.

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FedWatch: Target rate (in bps) possibilities, according to the CME Group (as of 08/13/2026– 12:00 PM EST):

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The Number of U.S. Homebuyers Just Dropped to a Record Low, Shifting the Market Further in Buyers’ Favor:

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Retiring Soon? 4 Crucial Money Moves Every Homeowner Should Make Before Retirement:

· 1 year from retirement: Decide when you’ll claim Social Security

· 9 months from retirement: Review your yearly housing costs

· 6 months from retirement: Decide on a withdrawal plan and review your budget

· 3 months from retirement: Get your estate in order

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Houses don’t stay on market long in these hot ZIP codes

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Price Progress

July CPI came in at 0.1% and core CPI 0.2%. This brought the Y-o-Y trend for CPI to 3.4%, from 3.5% last month, and core CPI to 2.5% from 2.6% last month. Better yet, three-month core CPI is at 1.6% annualized and 2.4% on a six-month basis. This report has reduced the chances of a September rate hike from 50% pre-data release to 40%. I expect absolutely no hike. - Elliot Eisenberg, Economist

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News You Can Use:

· Trump May Eye Cuts to Capital Gains Tax for Home Sellers, Official Says

· Mortgage rates finally stop rising, causing demand to trickle back

· U.S. budget deficit surged in July to highest level since March 2021

· A closer look at the price corrections in second-home housing markets Naples and Sevierville

· Invitation Homes CEO: Institutional homebuying ban will lower prices long-term

· Existing-Home Sales Decrease in July as Mortgage Rates Rise

· NAR Existing-Home Sales Report Shows 1.7% Decrease in July

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*Communication is intended for Industry Professionals only and not intended for Consumer Distribution

Interest rate and annual percentage rate (APR) are based on current market conditions as of 08/13/2026, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. Actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by HomeServices Lending, LLC. Not available in all states. Rate is as of 08/13/2026 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.

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