Will Markets Hold Last Week’s Gains?

What’s Happening Today

Mortgage rates are holding steady to start the week as markets digest last week’s strong gains and prepare for key economic reports ahead. Inflation data continues to show cooling trends, while employment data remains soft, supporting lower rate pressure overall. Investors are closely watching upcoming Personal Consumption Expenditures (PCE) inflation data and other economic releases that could shape the next move in mortgage rates. For now, markets appear to be stabilizing after recent improvements, keeping rate momentum favorable.

Inflation Trends Continue to Cool

January Consumer Price Index (CPI) showed headline inflation at 0.2% for the month and 2% annualized.
Year over year inflation declined from 2.7% to 2.4%, below expectations of 2.5%.
Core inflation rose 0.3% monthly but would have been 0.2% without a spike in airline fares.
Core inflation slowed from 2.6% to 2.5% year over year.
Shelter costs increased 0.2% monthly but continue showing longer-term cooling trends.
Limited signs of tariff-related inflation pressure were reported.

Cooling inflation continues to support lower mortgage rate pressure and keeps markets optimistic about future rate improvements.

Labor Market Shows Signs of Weakness

ADP reported private employers added about 10,250 jobs per week in January.
This equals roughly 41,000 monthly jobs, which remains a weak pace of hiring.
Previous readings were revised slightly higher but still indicate a soft labor market.
Recent government employment data has also seen significant downward revisions to total nonfarm employment numbers in 2025.

A slowing job market reduces inflation pressure and supports a more favorable environment for mortgage rates.

Rates Stabilize After Recent Improvement

Mortgage rates are holding near recent levels after improving last week.
Markets are maintaining gains despite some early trading volatility.
The 10-year Treasury yield is hovering near 4.05% and may test 4%.
Current market trends suggest mortgage rates could trend near 6% if favorable conditions continue.

Rate stability signals improving market confidence and provides a more predictable environment for homebuyers.

Key Economic Reports to Watch This Week

Wednesday: Mortgage applications, Housing Starts, Durable Goods Orders, Fed Minutes
Thursday: Jobless Claims, Pending Home Sales
Friday: Personal Consumption Expenditures (PCE), Q4 GDP, New Home Sales
PCE is the Fed’s preferred inflation measure and could significantly impact rate direction.

Upcoming data releases will likely determine whether mortgage rates continue improving or move higher.

Final Takeaway

Mortgage rates are holding steady as inflation continues cooling and employment data shows signs of slowing, both of which support a favorable rate environment. Markets are now focused on key economic reports this week, especially the Fed’s preferred inflation measure, which could influence the next move in mortgage rates and housing affordability.

If you’re thinking about buying, refinancing, or exploring your options, reach out to discuss how today’s market conditions may impact your strategy.