The second straight weekly decline masks a harder truth about where rates actually stand
Mortgage borrowing costs declined for the second consecutive week, according to the Primary Mortgage Market Survey (PMMS) released Thursday by Freddie Mac. However, the modest pullback offers limited comfort for a housing market still operating well above its year-ago rate levels.
The 30-year fixed-rate mortgage (FRM) averaged 6.65% in the week ending August 20, down from 6.67% the prior week. A year ago, that same benchmark stood at 6.58%, meaning the two-week dip still leaves borrowing costs higher than they were in August 2025.
"With a dip in rates providing modest relief for homebuyers, it's important to remember borrowers can potentially save thousands by shopping around for the best mortgage rate," said Sam Khater, Freddie Mac's chief economist.
The 15-year FRM, commonly used by homeowners refinancing existing loans, eased to 5.95% from 5.96% the prior week. A year ago, that rate averaged 5.69%, placing both benchmarks above where they stood at the same point in 2025.
Rate relief runs up against a harder ceiling
Mortgage rates have trended mostly higher this year, eroding purchasing power and contributing to continued sluggishness in home sales.
Existing home sales in the US slowed again in July, extending a rut that has persisted since borrowing costs began climbing from pandemic-era lows in 2022.
Understanding how geopolitical tensions have reshaped mortgage rate expectations this year is now an essential part of the client conversation for brokers across the country.
The principal driver behind the year's rate surge has been the US-Iran conflict, which began in late February and sent crude oil prices higher, stoking sustained inflation expectations.
Long-term bond yields, which mortgage rates generally track, moved accordingly. As of midday Thursday, the 10-year US Treasury yield stood at 4.71%, compared with 3.97% before the conflict began.
In a move aimed at easing that pressure, the US Treasury Department announced Wednesday it would at least double the volume of government bonds it plans to buy back over the coming months.
The announcement helped pull yields lower after the 10-year note had climbed to its highest level in more than a year.
What the backdrop means for brokers
For mortgage professionals advising clients on timing, the two-week pullback may support near-term buyer confidence, but the broader context is difficult to spin positively.
The 15-year refinance rate at 5.95%, running 26 basis points above its year-ago average, narrows the pool of homeowners for whom a refinance makes financial sense right now.
Helping clients compare mortgage rate quotes from multiple lenders remains one of the most reliable tools in the origination toolkit, and one Freddie Mac's chief economist underscored explicitly in Thursday's release.
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