Last Week's Mortgage Rate Recap:

Rates improved slightly

Last week rates moved almost exactly as we forecasted they would. Average mortgage rates moved higher on Tuesday after the long holiday weekend, matching recent highs, but quickly improved to end the week slightly better as markets adjusted to the idea that the Fed will continue to be aggressive in fighting inflation.

This Week's Mortgage Rate Forecast:

Rates looking for rates to improve

Mortgage rates this week are in a position to move lower, but whether they do or not will depend on the inflation data that comes in this week. Tuesday's consumer inflation report is expected to show that inflation has slowed in August after falling slightly in July. If the report comes in as expected, it is likely to help mortgage rates to move at least slightly lower.

What's affecting rates this week:

• Inflation data: Tuesday we get the consumer inflation data, and Wednesday we get wholesale inflation data. Signs of easing inflation would help rates improve, but any surprises showing inflation isn't slowing would pressure rates to move higher.
• Europe's economy: Concerns about surging energy costs overseas and the implications on global inflation could be bad for rates here in the U.S.