Mortgage rates moved higher for the first time in three weeks, as the 10-year Treasury yield remained elevated in the wake of Secretary Scott Bessent's debt repurchase plans.
Bessent's plans to repurchase longer-term bonds is not impressing the markets, while the July personal consumption expenditures index data, while not showing inflation strengthening, also did not find it was slowing, said Kate Wood, NerdWallet's lending expert in a Thursday morning statement.
"There wasn't a lot motivating mortgage rates to get moving in either direction," Wood said.
But Fed Chair Kevin Warsh's speech tomorrow at the Kansas City Fed's annual meeting in Jackson Hole, Wyoming, could change things, possibly not for the better when it comes to mortgage rates.
"If his speech lacks substance, that could push mortgage rates higher," Wood said. "The FOMC seems to have a lot more confidence that inflation will subside on its own than the markets do. If fears that inflation will continue unabated intensify, that'll drive bond yields — and mortgage rates — up."
This week's Freddie Mac rate survey findings
The 30-year fixed rate mortgage averaged 6.66% on Aug. 27, the Freddie Mac Primary Mortgage Market Survey reported. It was up from 6.65% a week ago, and 6.56% for the same time in 2025.
The 15-year FRM had a 3 basis point rise week-to-week to 5.98%. A year ago, it averaged 5.69%.
"The economy remains resilient, demonstrated by steady consumer spending and rising household incomes," said Sam Khater, Freddie Mac chief economist, in a press release. "More homes coming on the market and slower price growth in many areas are giving buyers better options and helping create a more balanced housing market."
Lender Price data on the National Mortgage News website put the 30-year FRM at 6.95% on Thursday morning, whereas a week ago, it was over 7%.
The 10-year Treasury yield, which peaked at 4.74% on Aug. 21, dropped 10 basis points by Tuesday's close before rising back to 4.66% the following day. It was just shy of this level mid-morning on Thursday.
The MBA's application survey rate data
The Mortgage Bankers Association's Weekly Application Survey for the period ended Aug. 21 reported the 30-year conforming mortgage at an average rate of 6.78%, a gain of 1 basis point from the prior week.
But it was still higher than the jumbo average rate of 6.73%, even though this increased 2 basis points week-to-week.
"Mortgage applications decreased for the second consecutive week, with both purchase and refinance activity down modestly on a weekly and annual basis," Bob Broeksmit, the MBA's president and CEO, said in a Thursday morning statement. "Mortgage rates have risen over the past two months, weighing on housing demand as affordability challenges this summer continue to constrain borrowers."
The current rate environment means origination volume will remain weak, especially on the purchase side as the selling season winds down, Keefe, Bruyette & Woods said in a note on the MBA release.
"This backdrop should continue to pressure mortgage originators, but we remain positive on some servicing-heavy names (Rocket and Rithm) where the risk-reward remains relatively compelling," wrote Bose George, a KBW analyst.
Meanwhile, the PCE, the Federal Reserve's preferred inflation metric, rose 3.7% on an annual basis, well above the 2% target.
The markets are debating what this means for the short-term rates the Fed controls. Federal funds futures on Wednesday found 60% of the traders were expecting no change at the September meeting, while 40% are of the belief rates will be increased.
