Housing News

Mortgage Interest Rates Dip, Giving Homebuyers Some Relief

Mortgage interest rates edged lower this week, offering homebuyers a bit of relief as the summer housing market winds down.

The average rate on a 30-year, fixed-rate mortgage fell to 6.65% for the week ending Aug. 20, according to Freddie Mac. That was down slightly from 6.67% a week earlier, but was a little higher than the average of 6.58% at this time last year.

“A dip in rates [provided] modest relief for homebuyers,” said Sam Khater, Freddie Mac’s chief economist, in a statement.

A homebuyer purchasing a $400,000 home with 20% down would pay about $2,054 a month in principal and interest at this week’s average mortgage rate. This does not include home insurance, property taxes, or homeowner association fees.

The latest Freddie Mac rate is based on mortgage rates over the past week, so it may not fully reflect more recent movements in financial markets.

Mortgage rates generally follow the 10-year Treasury yield, aka the bond market, which rose to about 4.70% on Thursday, according to Realtor.com Senior Economist Jake Krimmel. Bond yields have been volatile recently as investors weigh inflation and the economic outlook, potentially putting upward pressure on borrowing costs.

While mortgage rates remain elevated, there are signs that affordability has improved for homebuyers this year.

Mortgage rates have averaged 6.35% so far in 2026, compared with 6.60% in 2025, according to Krimmel. Asking prices on homes have also fallen year-over-year for nine consecutive months.

That combination may help some homebuyers stretch their budgets further, particularly as the market heads toward late summer and early fall.

Homeowners also continued to show interest in refinancing their mortgages.

Overall mortgage applications dipped just 0.4% in the week ending Aug. 14 compared with the previous week, according to the Mortgage Bankers Association (MBA). Refinance applications moved in the other direction, increasing 2% for the week compared to the previous one.

Refinancing also accounted for 41.9% of all mortgage applications, up from 40.7% the previous week.

Applications to purchase a home declined 2% from the previous week and were 3% below the same period last year.