Over the past week, mortgage rates have trended to their lowest levels since the last few days of May, and have overall lost half the increase recorded since mid-January. For borrowers with prime credit and an 0.8 loan-to-value ratio, the fixed 30-year mortgage rate stood at 4.36% on July 16th, down from a 4.45% peak in the first few days of June.

While inflation data and retail sales numbers should have pushed rates higher, Zillow suggests that the Federal Reserve is taking a “slightly less hawkish monetary policy stance” than anticipated. Escalating trade concerns and low housing numbers have also raised concerns about a coming general slowdown.

Over the coming week, markets are likely to pay more attention to housing data than they would have otherwise given fears that the sector may be slowing. Mortgage rates could dip further if housing data come in particularly weak. Zillow expects June existing and new home sales, out next week, to show small declines from May.

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