U.S. mortgage rates are holding near elevated levels heading into Friday, with the average 30-year fixed rate at 6.66% and the 15-year rate at 5.98%. Attention now turns to Federal Reserve Chair Kevin Warsh’s Jackson Hole address as Treasury yields remain high and mortgage demand shows fresh signs of weakening.
30-Year Mortgage Rate Holds at 6.66%
Freddie Mac said Thursday that the average 30-year fixed-rate mortgage was 6.66% as of Aug. 27, little changed from 6.65% a week earlier. The 15-year fixed mortgage averaged 5.98%, up from 5.95%, while the 30-year rate stood above its 6.56% level from the same period last year.
Freddie Mac’s figures are national weekly averages derived from mortgage applications submitted by lenders, rather than individual lender quotes. The relative stability masks how stubborn borrowing costs have become: the 30-year average has remained in the mid-6% range through much of the summer after briefly reaching 6.43% in early July.
U.S. 30-Year Fixed Mortgage Rate Since 1971. Source: Freddie Mac via FRED
The long-term chart puts current rates in perspective. Mortgage costs remain well below the double-digit levels reached decades ago, but they are substantially above the exceptionally low rates seen around 2020-2021, continuing to weigh on housing affordability.
Treasury Yield Near 4.68% Keeps Mortgage Rates Under Pressure
Friday’s Treasury market could determine whether mortgage rates remain stable or begin moving again. The supplied TradingView chart showed the 10-year U.S. Treasury yield near 4.68% early Friday, above its 50-week exponential moving average near 4.40%.
U.S. 10-Year Treasury Yield and 50-Week EMA. Source: TradingView
The weekly chart shows the 10-year yield maintaining an upward bias, with its relative strength index around 60.6. That is not an extreme reading, but the combination of yields above the longer-term moving average and positive momentum suggests the bond market has yet to provide mortgage borrowers with significant relief.
Mortgage rates do not move directly with the Federal Reserve’s policy rate. They are heavily influenced by longer-term Treasury yields, mortgage-backed securities and expectations for inflation and economic growth.
That puts Fed Chair Kevin Warsh’s 10 a.m. ET keynote at the Jackson Hole Economic Policy Symposium on Aug. 28 squarely in focus. Any shift in expectations for inflation or future monetary policy could move Treasury yields and, in turn, influence lender pricing.
Mortgage Applications Slip as Higher Rates Restrain Demand
The impact of elevated borrowing costs is also visible in mortgage demand. The Mortgage Bankers Association said total mortgage applications fell 1% in the week ended Aug. 21, while the seasonally adjusted Purchase Index declined 0.3%. Purchase applications were 5% below their level a year earlier.
U.S. MBA Purchase Index. Source: Mortgage Bankers Association of America
The Purchase Index slipped to 154.4 from 154.8, extending a broader retreat from stronger readings earlier in the summer. The MBA also reported that its average contract rate for conforming 30-year fixed mortgages increased to 6.78% from 6.77%, while refinancing applications fell 2%.
The difference between MBA’s 6.78% rate and Freddie Mac’s 6.66% does not represent a contradiction; the organizations use different surveys and methodologies.
There is some relief emerging elsewhere in the housing market. Redfin said new listings reached their highest level since April during the four weeks ended Aug. 23, while pending sales fell to a six-month low. Active listings also increased, giving buyers more inventory and potentially greater negotiating leverage even as financing costs remain restrictive.
For mortgage rates today, the central question is whether Treasury yields can retreat from current levels. A meaningful decline in the 10-year yield could create room for mortgage rates to ease, while renewed bond-market selling after Jackson Hole could keep the 30-year rate firmly in the mid-to-upper 6% range.
