Mortgage rates slipped on Friday, but they are still close to one-year highs. 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.
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. The average 30-year fixed mortgage rate was 6.65% this week through Wednesday, down from 6.67% a week earlier, according to Freddie Mac. Earlier reporting noted: The 30-year Treasury yield reached its highest level since 2007. Long-term government bond yields briefly moved above 5.3% on Tuesday, their highest level in 19 years, as investors became more concerned about inflation and the US fiscal deficit, according to Yahoo Finance.
Rates for other types of home loans moved differently. However, mortgage rates are still higher than they were a year ago. The small drop came during a very unstable week for the bond market. Long-term US government bond yields moved sharply as investors worried about inflation and the country’s growing budget deficit. The Treasury then stepped in to support the bond market. Why did mortgage rates fall?
Earlier reporting noted: Mortgage rates drop despite bond market turmoil: Why rates may rise again in coming weeks Mortgage rates fell slightly last week despite a big jump in bond market volatility. Earlier reporting noted: Why did mortgage rates fall?
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. 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.
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 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.
Oil prices have eased recently, but bond yields remain much higher than before the conflict began.
