Weekly Mortgage & Market Update

Week of August 10, 2026 in Review

Inflation brought some welcome news in July, while home sales slowed and home prices continued to show strength.

Inflation Data Shows Encouraging Signs

Consumer prices rose just 0.1% in July, bringing annual inflation down to 3.4%. Gasoline prices increased during the month but remained lower on average than in June, helping keep overall inflation in check.

Core inflation, which excludes food and energy, rose 0.2% from June and slowed to 2.5% annually—its lowest annual rate since March 2021 and matching February's level.

Wholesale prices were also more subdued than expected, remaining essentially flat for the month, while both headline and core wholesale inflation declined annually.

Looking at May, June, and July together and annualizing that pace, inflation is running at approximately 1.6%. While three months is a relatively short period, the recent trend is encouraging and currently below the Federal Reserve's 2% inflation target.

Cooler inflation reduces pressure on the Fed to raise its benchmark Fed Funds Rate. This is particularly notable following July's weaker jobs report, which showed job losses and other signs of labor market softness. The Fed will continue monitoring inflation, employment, and geopolitical developments as it considers future policy decisions.

Existing Home Sales Slow in July

Existing home sales declined 1.7% from June to July, marking the second consecutive monthly decline and bringing the seasonally adjusted annual rate to 4.06 million homes. Despite the decline, sales remained 0.7% higher than a year ago, while inventory dipped 1.9% from June.

NAR Chief Economist Lawrence Yun noted that home sales have remained relatively stable despite recent mortgage rate movements. Sales are up 2.4% so far this year, and Yun suggested the market could gain significant momentum if mortgage rates move closer to 6%.

Home Values Show Continued Strength

According to Cotality's latest Home Price Insights report, home prices increased 0.3% from May to June and are 1.2% higher than a year ago.

Home prices also rose 1.7% from March through June. If that four-month pace were sustained over a full year, it would equal approximately 5.1% annual appreciation.

For perspective, a $500,000 home appreciating 5% would gain approximately $25,000 in value, demonstrating how steady appreciation can help homeowners build wealth over time.

In Focus: Consumer Spending and Unemployment Claims

Retail sales declined 0.6% in July, coming in below expectations. Lower gas prices contributed to weaker gas station sales, while online retail sales also declined from June, likely reflecting a pullback following June's Prime Day sales.

Even when looking at the past two months together, online sales are down 1.3%, which could be an early indication that consumers are becoming more cautious with their spending.

Initial unemployment claims remain relatively low at approximately 209,000, though some displaced workers may be turning to freelance or gig work rather than filing for benefits.

Continuing unemployment claims remained elevated at 1.78 million, suggesting some job seekers are taking longer to find new employment.

Family Hack of the Week

Plums are in season, making it a great time to try this Plum Cornbread from Food Network. This recipe serves 6 to 8.

Toss 4 to 6 sliced plums with 3 tablespoons sugar and let stand for 30 minutes. Preheat the oven to 350°F and butter an 8-inch cast-iron skillet or 8-by-8-inch baking dish.

Combine ¾ cup flour, 1 cup yellow cornmeal, 2 teaspoons baking powder, 3 tablespoons sugar, and ½ teaspoon kosher salt. Separately, whisk together 1 cup milk, 3 tablespoons honey, 1 teaspoon vanilla, and 2 eggs. Add the wet ingredients to the dry and stir just until combined.

Transfer the batter to the pan, arrange the sugared plums on top, and bake for 25 to 30 minutes until golden and cooked through. Serve warm with your favorite vanilla ice cream.

What to Watch Ahead

Housing takes center stage next week, beginning with Home Builder Confidence on Monday, followed by Housing Starts, Building Permits, and Pending Home Sales on Tuesday.

Investors will also be watching Wednesday's release of the Fed's July meeting minutes and Thursday's weekly jobless claims for additional insight into the economy.

Source: MBSHighway