Overview: The primary driver of mortgage rates over the past week was shifting sentiment about the Trump administration’s ability to pass pro-growth legislation, and the net effect was positive for mortgage rates. The economic data had little impact. As a result, mortgage rates ended the week slightly lower.

Late last week, financial markets reacted to President Trump's comments about the events in Charlottesville. Rumors about the resignation of a key economic advisor and the apparent loss of support from political allies and business leaders caused investors to reduce their expectations that pro-growth legislation will pass any time soon. This was bad for stocks, but it was good for mortgage rates because the outlook for future inflation also declined. Sentiment reversed on Tuesday, however, when it was reported that the Trump administration and key Republicans in Congress had made progress on tax reform. The measures under consideration would generally be good for business and are expected to boost economic growth. Stocks rallied following the news, and mortgage rates rose. Then, the outlook shifted yet again on Wednesday following remarks from Trump about possibly ending the NAFTA trade agreement. This likely would hinder global growth, which caused mortgage rates to fall.

The data on sales of newly built homes released on Wednesday was somewhat disappointing. In July, new home sales declined 9% from June, which was well below the expected levels. The results for June were revised higher, however, partially offsetting the shortfall in July. This report tends to be very volatile from month to month. Week Ahead

Looking ahead, investors will be watching for further developments regarding the Trump administration. On the economic front, the Existing Home Sales report will be released on Thursday. The Durable Goods report, an important indicator of economic activity, will come out on Friday. The first revisions to second quarter gross domestic product (GDP), the broadest measure of economic activity, will be released on August 30. The next Employment Report will come out on September 1. In addition, global central bankers will be attending the annual Jackson Hole conference Thursday through Saturday, and any comments about future monetary policy could affect mortgage rates.