This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
Mortgage rates experienced upward pressure over the past week, driven primarily by market reactions to federal policy signals and economic data.
Key Interest Rate & Bond Movements
- 30-Year Fixed Rates: Top-tier 30-year fixed daily averages rose from ~6.75% up to 6.89% - 6.91% toward the end of the week, reaching multi-week highs.
- 10-Year Treasury Yields: Yields moved into the 4.65% – 4.70% range following hawkish signals regarding persistent inflation concerns.
Economic & Policy Drivers
Federal Reserve Sentiment: The primary catalyst for the week's rate pop was the hawkish undertone from Fed commentary highlighting that PCE inflation (currently around 3.7%) remains above the 2.0% target. Investors pushed out expectations for near-term interest rate cuts, prompting a bond market sell-off.
- Inflation Concerns: Energy market pressures and resilient core economic metrics continue to keep inflation stubborn, preventing Treasury yields from finding sustained downward momentum.
Takeaways
o Emphasize Structure & Buydowns: With rates sitting near the upper edge of their recent range, discuss temporary or permanent rate buydowns to lower initial monthly payments for payment-sensitive buyers.
o Monitor Incoming Data: Keep buyers pre-approved and educated so they are ready to lock quickly if rates pull back slightly into the mid-6% range on upcoming labor or inflation prints.
o Inventory Opportunities: Buyers holding out for significant rate drops may be waiting a while, as forecasts generally keep rates in the mid-to-high 6% range through late into the year. Use current inventory stability to negotiate seller concessions for concessions or rate buydowns.
o Buyer Messaging: Remind clients that buying the home secures today's purchase price, while the mortgage rate can always be refinanced down the road if market conditions improve.
FedWatch: Target rate (in bps) possibilities, according to the CME Group (as of 09/03/2026– 12:00 PM EST):
House Price Appreciation by State and Metro Area in the Second Quarter of 2026 – Eye On Housing
A Tale of Two Tech Cities: San Francisco’s Housing Market Booms While Seattle Slumps:
Private Residential Construction Spending Continues to Weaken:
Building Bifurcation
July US construction spending declined 3.8% Y-o-Y and is at $2.2 trillion seasonally adjusted. Public construction was up 1.7% Y-o-Y, largely due to highway/street construction, which rose 4.5% Y-o-Y. Private residential construction fell 7.3% Y-o-Y and is lousy. Private non-residential fell 3.3%Y-o-Y despite being massively propped up by data center construction, up 57.2% Y-o-Y. Absent data centers, power (up 6.5% Y-o-Y) and highways/streets construction, construction activity would be sinking. - Elliot Eisenberg, Economist
News You Can Use:
· Will the Fed raise rates in September?
· Fed Governor Barr says he'll support rate hike if inflation doesn't ease
· Mortgage rates surge to the highest since June 2025
· Home Price Expectations Survey (HPES) | Fannie Mae
· Waiting for homebuying to get more affordable? What to expect in 2027
· The Most Expensive Renovation Mistakes Happen Before Construction Starts
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 09/03/2026, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. Actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by HomeServices Lending, LLC. Not available in all states. Rate is as of 09/03/2026 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
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