Rates ease for the first time in six weeks
The 30-year fixed-rate mortgage slipped two basis points to 6.67% for the week ending August 13, according to Freddie Mac's Primary Mortgage Market Survey. That's the first weekly decline in six weeks and a modest pause in a rate environment still shaped by the US-Iran conflict and its pull on energy markets.
The reprieve does little to alter the broader picture. Rates remain above last year's 6.58% average for the same period and well above the 5.98% recorded in late February, before the war began.
The 15-year fixed-rate mortgage also eased, averaging 5.96%, down from 6.01% the prior week, though still higher than the 5.71% seen in August 2025.
Geopolitics tighten the market's grip
The week's movement tracked a pullback in the 10-year Treasury yield, which fell to 4.61% by midday Thursday from 4.72% at the start of the week.
Treasury yields serve as the primary pricing benchmark for home loans, and as oil prices drive the bond market and mortgage rates, the Iran conflict remains the dominant variable.
Last week, speculation around a peace deal to reopen the Strait of Hormuz pushed crude lower and pulled yields with it. That window closed quickly.
Tehran demanded service fees for Strait transit, the lifting of US port blockades, sanctions relief, and war reparations. President Donald Trump insisted the US holds "total control" over the waterway — a claim Iran disputes — and cargo vessel traffic fell to a one-week low of eight ships.
For the mortgage market, that leaves inflation expectations unsettled and rate relief elusive.
Sam Khater of Freddie Mac said that while higher mortgage rates continue to affect affordability, improving inventory and slightly lower listing prices suggest the housing market is showing signs of adjustment.https://t.co/yiihzcmduM
— Mortgage Professional America Magazine (@MPAMagazineUS) August 7, 2026
Applications rise as borrowers adapt
Despite elevated borrowing costs, both purchase and refinance activity increased ahead of this week's data, a sign that even incremental rate movement is enough to bring some buyers off the sidelines.
Freddie Mac chief economist Sam Khater said the trend reflects sustained borrower sensitivity. "Mortgage rates remained relatively stable this week at 6.67%," Khater said.
"Housing affordability has improved from a year ago, and recent increases in purchase and refinance applications suggest that borrowers continue to respond to even modest changes in mortgage rates."
The consensus view that high mortgage rates will keep the US housing market subdued through 2026 has hardened among most forecasters.
Consumer and wholesale inflation both cooled in July, and if that trend holds the Fed may pause further rate increases, an outcome that would anchor mortgage costs rather than lower them meaningfully.
US existing-home sales slowed again in July, underscoring the affordability ceiling that remains for much of the market.
Melissa Cohn, regional vice president of William Raveis Mortgage, previously told Mortgage Professional America that the rate environment is keeping many borrowers on the sidelines.
"Those people who must move and those people who must refinance will be doing so," she said. "But there are people who still don't like the rate environment that we're in today, and it's keeping them on the sidelines."
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