The average interest rate on a 30-year, fixed-rate mortgage rose to 6.55% APR, according to rates provided to BW by Zillow. This is four basis points higher than yesterday and two basis points higher than a week ago. (See our chart below for more specifics.) A basis point is one one-hundredth of a percentage point.
For more — a LOT more — on why the Treasury’s big move isn’t likely to be a game changer, keep reading below the chart.
P.S.: While the economy never sleeps, markets are closed on the weekends. The rates you see Friday are unlikely to change much (if at all) until Monday.
Average mortgage rates, last 30 days
🤓 Kate on Rates: August 20, 2026
📈 What influences mortgage rates?
On Wednesday, the Department of the Treasury announced it would at least double the scale of its buybacks for longer-term bonds, from $2 billion to $4 billion. The idea is to try to lower bond yields by increasing demand, which theoretically should lower prices.
But that’s assuming the investor buys the bond from the issuer and retains the bond for its entire lifespan. In reality, most of the action in the bond market is bonds being resold. That means investors are buying them at today’s price, not at their issued price.
Regardless of what price the investor’s paying, the interest payout from the issuer remains the same. So if you’re paying more than the face value, your interest aka the yield is going to be lower relative to the price you paid. If you pay less than the bond cost when it was issued, your yield will be higher. That’s been happening an awful lot lately as the yields on longer-term Treasury bonds, like the 10-, 20- and 30-year, have been riding high.
This is the supply-and-demand dynamic the Treasury’s trying to influence with the increased buybacks. If there’s more demand for these longer-term bonds, sellers should be able to ask for higher prices — and when those bonds sell at higher prices, they’ll have lower yields.
Apparently, $4 billion doesn’t go as far as it used to, because the market quickly shrugged off the Treasury announcement. But that’s not the whole story.
The Treasury’s move adds a big buyer to the mix, but it doesn’t disrupt the larger forces that have been driving up yields for months. There’s a lot, including shifting foreign investments, A.I. companies’ endless need for cash and the Iran war.
Markets are increasingly unsure whether the Fed will hike rates this year.
As long as potential bond investors believe that the Federal Reserve may allow inflation to rise unchecked, it is likely that we will continue to see an increase in bond yields and, consequently, higher mortgage rates.
Next week, the July Personal Consumption Expenditures Price Index will be released, which is the Fed’s preferred measure of inflation. Forecasters are currently predicting that the PCE will show a slight slowdown in inflation. However, if the PCE data surprises in either direction, it could affect market expectations regarding the Fed.
If your current mortgage rate is at least 0.5 to 0.75 of a percentage point lower than today’s rates, refinancing may be a smart move, especially if you plan to stay in your home long enough to recoup the closing costs. With rates currently where they are, considering a refinance may be beneficial if your current rate is around 7.05% or higher.
When deciding whether to refinance, consider your goals – whether you want to lower your monthly payment, shorten your loan term, or access home equity. It may be more cost-effective to opt for a cash-out refinance over a rate-and-term refinance if the overall costs are lower than keeping your original mortgage and adding a HELOC or home equity loan.
If you are looking for a lower rate, use BW’s refinance calculator to estimate potential savings and determine how long it would take to break even on refinancing costs.
There is no perfect time to start shopping for a home, but what matters most is whether you can comfortably afford a mortgage at today’s rates. Focus on getting preapproved, comparing lender offers, and figuring out a monthly payment that fits your budget.
If you have a mortgage rate quote that you are satisfied with, consider locking in your rate, especially if your lender offers a float-down option. Rate locks protect you from rate increases during the loan processing period, providing peace of mind in a fluctuating market.
Keep in mind that advertised rates are usually sample rates for borrowers with excellent credit, substantial down payments, and who are willing to pay for mortgage points. Your individual quote may vary based on your financial situation. text using different words:
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