Mortgage rates continued to move lower last week.

While mortgage rates are still significantly higher than the beginning of this year, they have declined over 0.50% from highs in mid-June that were over 6.00%. Economic indicators last week pointed to slowing growth and continuing increases in initial jobless claims. Competition among buyers is easing in the housing market as affordability challenges mount, and builder confidence is eroding. While labor markets are still tight and inflation readings high, investors are pricing more risk of recession into medium- to long-term interest rates, believing the Fed will have to pivot away from further rate hikes in the future. This is helping reduce longer-term interest rates and drive equity prices up from lows seen earlier this year. The Federal Reserve raised the target federal funds rate today another 0.75%, in line with market expectations. Investors will be analyzing comments from the Fed this week for any indications of more hawkish or dovish language that could impact interest rate expectations.

Key economic data releases on GDP and personal consumption expenditures later this week will provide further readings on economic activity and inflation pressures that could influence market views going forward.

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