NEW YORK, NY — Mortgage rates were still pinned near 7% in the final week of August, according to HousingWire’s Mortgage Rates Center, even after a Treasury plan to buy back longer-term debt briefly nudged borrowing costs lower. By Tuesday, the average rate for a 30-year conforming loan stood at 6.92%, up 6 basis points from a week earlier.
Other loan types moved too. Thirty-year FHA-backed loans averaged 6.63%, up 4 basis points, while jumbo loans posted the week’s sharpest move, climbing 34 basis points to 7.14%. The jump matters because jumbo loans are often more exposed to shifts in investor appetite than loans backed by government-sponsored enterprises.
What The Numbers Show
HousingWire said the Treasury Department announced last week that it would begin buying back long-term Treasury debt on Sept. 9 in an effort to calm bond markets and push yields lower. The plan was widely seen as potentially helpful for mortgages, because lower Treasury yields often ease pressure on home-loan pricing.
But the effect proved short-lived. Melissa Cohn, regional vice president for William Raveis Mortgage, said the move helped for about a day before oil prices, the federal deficit and broader inflation worries took back control. She also pointed to federal debt topping $40 trillion and a fiscal 2026 deficit of about $1.8 trillion as signs that investors remain focused on larger budget pressures.
Why Rates Moved
Nash Paradise, director of sales at NXT Mortgage Co., said jumbo loans tend to react more aggressively when markets turn uncertain because they are not backed by Fannie Mae or Freddie Mac. He said investors are reassessing risk, especially as default rates have risen in recent months and servicing profitability has weakened.
That sensitivity can widen spreads on nonagency mortgage products, including jumbos, when mortgage servicing rights are seen as less valuable. The Treasury’s buyback announcement briefly flattened the yield curve, but long-term yields climbed again as investors refocused on inflation, oil prices and the growing federal debt load.
What Comes Next
For now, traders do not expect the Federal Reserve to provide near-term relief. CME Group’s FedWatch tool showed about 60% of interest rate traders expecting no change at the Fed’s mid-September meeting, while the other 40% were calling for a 25-basis-point hike. Rate cuts were not priced in until July 2027 in that survey.
The Treasury’s buybacks of 10- to 30-year securities are set to run from Sept. 9 through Nov. 4, with purchases doubling to $4 billion per operation. Bank of America strategists estimate that could mean $66 billion to $132 billion in additional buying. Readers who want to track the moves can follow HousingWire’s Mortgage Rates Center, Treasury announcements and CME FedWatch updates as markets react to Friday’s Jackson Hole speech from Fed Chair Kevin Warsh.
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