Rates Hit a 4-Week Low as Inventory Reaches Its Highest Point Since 2019

Inside Lending – FOR THE WEEK OF AUGUST 17, 2026

QUOTE OF THE WEEK

 “Opportunity is missed by most people because it is dressed in overalls and looks like work.”—Thomas Edison

NATIONAL MARKET UPDATE

Active inventory rose 3.2% and approached 1.2 million homes, its highest level since November 2019. Homes sold at the same pace as last year for an eleventh consecutive week of matching or beating year-ago speed.

Mortgage delinquencies improved slightly during the second quarter, falling to 4.37% of outstanding residential loans. The improvement points to continued resilience among homeowners despite elevated borrowing costs.

Mortgage credit availability reached its highest level in four years in July, expanding financing options after tightening in June. Greater credit availability could give qualified buyers another tailwind as the market heads toward fall.

REVIEW OF LASTWEEK

INFLATION COOLS…Inflation eased last week, lowering expectations for another Federal Reserve rate increase. That’s welcome news for housing, where less pressure on interest rates could help mortgage rates stabilize and give buyers more confidence to move forward.

Inflation remains above the Fed’s target, while geopolitical uncertainty and energy prices remain volatile. Still, consumer and wholesale inflation showed signs of moderation, giving policymakers more room to remain patient.

The broader economy continues to show resilience. Consumer spending remains solid, retail sales were 4.7% above year-ago levels, and corporate earnings expectations continue strengthening across a wider range of industries.

The week ended with the Dow down 0.6%, to 53,732, the S&P 500 up 0.4%, to 7,786, and the Nasdaq up 0.1%, to 26,729.

Bond yields eased as cooler inflation reduced expectations for another Federal Reserve rate increase. The move helped relieve pressure on mortgage rates, which fell to their lowest level in nearly four weeks.

DID YOU KNOW…Homes for sale are now at their highest level since November 2019—nearly double the pandemic-era low reached in August 2021.

THIS WEEK’S FORECAST

HOUSING, JOBS, THE FED…Markets will watchfresh housing reports, weekly unemployment claims and Fed commentary for clues about the economy and interest rates. After cooler inflation and weaker July hiring, investors will be looking for further evidence that price pressures are easing without a sharper economic slowdown. For housing, the combination of improving inventory, greater mortgage credit availability and some recent rate relief could help buyers heading into fall. Continued moderation in inflation would also reduce pressure on Treasury yields and potentially give mortgage rates more room to settle.

FEDERAL RESERVE WATCH

Forecasting Federal Reserve policy changes in coming months. Cooler inflation and July’s weaker employment report have reduced pressure on policymakers to raise rates in September. Before the September 16 Fed meeting, officials will have inflation and employment data before deciding their next policy move. Note: In the lower chart, the 30.6% probability of change means there’s a 69.4% probability the rate will stay the same.

Current rate is 3.50%-3.75%.

AFTER FOMC MEETING ON:CONSENSUS

Sep 16th 3.75%-4.00%
Oct 28th 3.75%-4.00%

Dec 9th 3.75%-4.00%

Probability of change from current policy:

AFTER FOMC MEETING ON:CONSENSUS

Sep 16th 30.6%

Oct 28th 39.5%

Dec 9th 45.0%

BUSINESS TIP OF THE WEEK

More choices can make clients less decisive, not more. When inventory grows, become the person who helps buyers narrow the field—what’s worth seeing, where sellers may negotiate, and where the opportunity actually is.

If you’ve been sitting on the sidelines waiting for the market to give you an opening, this might be it. Whether you’re weighing your buying power, wondering if now’s the time to lock in a rate, or thinking through a refinance, let’s look at your numbers together and figure out your best next move.

Schedule your Mortgage Strategy Call today, and let’s put this week’s market shift to work for you.

Kevin Brierton

Branch Manager & SVP of Mortgage Lending

Certified Mortgage Planning Specialist

“Your No Excuse Lender”

NMLS #599873 | Luminate Bank NMLS #1281698