Mortgage Market Update - August 27, 2025

WASHINGTON, D.C. (August 27, 2025) - U.S. mortgage markets saw modest movement today as borrowers weighed mixed signals from lenders, secondary markets and economists ahead of tomorrow’s Federal Reserve policy remarks.

30-Year Rates Tick Up on Some Loan Types According to The Mortgage Reports’ daily survey, the average conventional 30-year fixed mortgage rate rose to 6.667% (6.726% APR), up 0.03 percentage point from yesterday. The 30-year FHA fixed rate held steady at 6.66% (6.719% APR), while the 30-year VA fixed rate increased by 0.1 point to 6.784% (6.835% APR).

MBA Survey: Rates Unchanged Week-Over-Week The Mortgage Bankers Association (MBA) reported today that its 30-year conforming fixed rate averaged 6.68% for the week ending August 22-unchanged from the prior week-even as refinance and purchase application volumes diverged. Purchase applications were flat, while refinance activity dipped 1.4% but remained 23% above last year’s pace.

Mortgage Spread Narrows to Three-Year Low In a Redfin analysis released yesterday, the gap between 10-year Treasury yields and mortgage rates (the “mortgage spread”) fell to 2.26 percentage points, its narrowest level since 2022. That tightening signals lenders are absorbing more Treasury risk, which could support further rate declines independent of Fed action. Redfin noted that this reduction has boosted homebuying power by roughly $20,000 on a $3,000-monthly payment budget since May.

Experts Divided on Near-Term Rate Direction Bankrate’s weekly poll of economists and mortgage professionals found that 42% expect rates to stay the same this week, 33% predict a rate increase, and 25% foresee a decline. Panelists cited mixed inflation readings and anticipation of remarks from Fed Chair Jerome Powell at Jackson Hole as key factors influencing Treasury yields-and therefore mortgage pricing.

What’s Next for Borrowers With the Fed’s Jackson Hole symposium concluding tomorrow, attention turns to any signals on the timeline for rate cuts. If Fed officials confirm a more dovish stance, Treasury yields-and mortgage rates-could edge lower. Until then, borrowers are advised to shop multiple lenders and consider timing refinances or home purchase locks based on their risk tolerance and financial goals.