The average 30-year fixed mortgage rate is 6.50% on Friday, August 21, 2026. The rate is down 2 basis points from Thursday, according to the Zillow lender marketplace. The latest move comes as volatility in the US bond market continues to put pressure on home loan rates, even after the Treasury Department started buying back government bonds.
Mortgage rates slipped on Friday, but they are still close to one-year highs.
The average 15-year fixed mortgage rate is 6.00%, up 8 basis points from the previous day, while the 5/1 adjustable-rate mortgage (ARM) is 6.25%, down 29 basis points from Thursday, according to Zillow. The average 30-year fixed mortgage rate fell to 6.65% this week from 6.67% last week, mortgage buyer Freddie Mac said Thursday via Associated Press. The average 30-year mortgage rate was 6.58% one year ago.
Rates for other types of home loans moved differently. However, mortgage rates are still higher than they were a year ago.
US housing market slowdown
Mortgage rates generally move in the same direction as the 10-year US Treasury yield . Lenders use the 10-year Treasury as an important reference when setting prices for home loans. The 10-year Treasury yield has risen sharply since late February. It was around 3.97% in late February before the war, but stood at 4.71% as of midday Thursday, according to the Associated Press. The 30-year mortgage rate is around 6.50% to 6.65%, depending on the source and loan terms.
Investors have therefore demanded higher yields on long-term government bonds, which has also kept mortgage rates elevated. Mortgage rates are closely linked to what happens in the bond market. They are affected by inflation, Federal Reserve policy decisions and investors’ expectations about the US economy. Higher oil prices can make inflation worries worse. This has kept pressure on mortgage rates even as some inflation concerns have cooled. Rising government debt is another concern for bond investors. Investors have been worried about the huge amount of US government debt, along with inflation and other economic risks. This is still much higher than the very low rates seen during the pandemic. Mortgage rates will depend on inflation, Treasury yields and what investors expect from the Federal Reserve. If bond yields stay high, mortgage rates could also remain high. This could keep home buying expensive and put more pressure on the US housing market.
Oil prices have eased recently, but bond yields remain much higher than before the conflict began.
