Mortgage rates climb for a third week
United States mortgage rates rose again on Thursday, pushing the benchmark 30-year fixed-rate loan to 6.76 per cent, up from 6.71 per cent the week before. The figure, reported by Freddie Mac, marks the highest level since June 2025 and adds roughly a few hundred dollars to the monthly cost of a typical mortgage.
Existing home sales slow to a year-low
The National Association of Realtors said existing-home sales fell 2 per cent from July to August, reaching a seasonally adjusted annual rate of 3.98 million units. That represents the slowest pace in more than a year and the third consecutive monthly decline, leaving the market just below the 4-million level economists had expected.
Inflation remains stubborn
Inflation data released by the U.S. Labour Department showed the Consumer Price Index rose 3.4 per cent year-on-year in August, matching July's rate. On a monthly basis, prices increased 0.4 per cent, driven by higher gasoline and diesel costs linked to renewed fighting in the Middle East. The Producer Price Index, a leading indicator of wholesale inflation, jumped 5.4 per cent from a year earlier, up from 4.8 per cent in July.
Broader economic backdrop
Higher fuel prices have pushed diesel to an average of $6.05 per gallon, a new record, while crude oil briefly touched $110 a barrel before easing to around $104. The rise in energy costs feeds through to freight charges and consumer prices, adding pressure on households already coping with higher grocery bills.
Labour market and markets react
Unemployment benefit claims dipped slightly to 206,000, staying within the historically low range of 200,000-230,000 per week. Meanwhile, U.S. equity markets rallied after oil prices retreated, with the S&P 500 poised to end a four-day losing streak.
What comes next?
Persistently high inflation and rising mortgage rates are likely to keep demand for homes subdued, prompting potential borrowers to postpone purchases. The Federal Reserve faces a delicate balance between curbing price growth and avoiding a sharp slowdown in credit activity. Market observers will watch upcoming policy meetings for clues on whether rate hikes will pause or continue.