Retail sales declined 1.1% in July, more than the 0.3% expected drop. Consumer spending is nearly 70% of all economic activity and a good gauge of overall economic health.

Minutes released from last month's Fed meeting show a willingness to start reducing asset purchases before the end of the year, which could push mortgage rates higher.

Unemployment claims hit a 17-month low last week, pointing to another month of robust job growth. Continuing claims also dropped to levels last seen in March 2020.

Housing starts were up 6.3% in June, although building permits for future activity were down slightly. Lumber prices are falling, which could help the new home market.

Home builder sentiment in August fell to the lowest level in a year as buyers face sticker shock. The sharp drop in the price of lumber hasn't yet impacted home prices.

Last week's overall mortgage applications were down 4% from the previous week. Purchase applications fell 2% for the week and were 19% lower than a year ago.