Mortgage rates saw a slight decrease this week amidst a flurry of news activity that could impact potential home buyers and refinancers. The average rate on a 30-year fixed-rate mortgage dropped by four basis points to 6.55% APR in the week ending Aug. 20, based on data from Zillow provided to BW. We calculate our weekly average using daily APRs recorded over the past five business days.
If you’re considering starting a home search, your preparedness is more important than market conditions. And if you’re ready, the information on pending home sales below might give you the confidence to move forward.
🤓 Kate on Rates: August 20, 2026
A surprise move from the Treasury
On Wednesday, the Department of the Treasury announced that it would double the scale of its weekly bond buying from $2 billion to at least $4 billion. This move aims to bring down yields on longer-term bonds, which have been increasing recently. The increased demand should help lower yields in the market.
The rise in bond yields, influenced by factors like the Iran war and advancements in AI, has made bonds less appealing to investors. The Treasury’s decision to boost bond buying is an effort to counteract this trend, which could impact mortgage rates tied to the 10-year Treasury note.
The Treasury’s move may not immediately decrease mortgage interest rates significantly. While initial market reactions were positive, yields have risen again. The $4 billion weekly investment is substantial, but relative to the national debt of $40 trillion, it may not have a substantial impact.
Monitoring bond market headlines could be beneficial for those tracking mortgage rates, as these rates are often linked to the 10-year Treasury note. When Treasury yields rise, mortgage rates tend to follow suit, and both have been on the rise for several months.
A moribund market with a silver lining
The housing market’s performance was revealed this week with the release of July pending home sales data from the National Association of Realtors. Unfortunately, July’s pending sales figures showed a decline both month-over-month and year-over-year.
Pending sales in July hit their lowest level since January, typically a slow month for sales. The rise in mortgage rates during the month may have contributed to the unexpected summer slowdown, but other factors were at play as well. Despite lower mortgage rates compared to the previous year, there was a year-over-year decrease in sales.
According to Mike Miedler, president and CEO of Century 21 Real Estate, potential buyers are hesitant to make a long-term commitment amidst economic uncertainty. However, he also mentioned that a slow market can offer opportunities for buyers to take their time in evaluating properties and negotiating deals.
BW’s July Homebuying Climate Index reflected these conditions, coming in at 54.2, indicating partly cloudy conditions for homebuyers. This has been the prevailing trend in the housing market for some time. following sentence:
He was unable to attend the meeting due to his illness.