Mortgage rates crept higher this week after an inflation report came in hotter than expected. The average 30-year fixed rate rose two basis points to 6.57% APR in the week ending Aug. 27, according to rates provided to NerdWallet by Zillow. Rates spiked Wednesday on the news, then eased back some — but not all the way.

Markets are still betting the Fed holds steady at its September meeting (about a 65% chance, per CME's FedWatch tool), which is normally good news for borrowing costs.

But this time, a hold might not be enough to keep mortgage rates in check. The Fed's preferred inflation gauge also came in above forecast, and a separate force is pushing rates up from another direction: Tech giants are flooding the bond market to fund AI infrastructure, which is driving up Treasury yields — a key benchmark mortgage rates track.

Translation, for buyers already stretched by high home prices? Rates could keep climbing even without a Fed hike. It's worth locking in sooner rather than betting on relief, and looking at strategies like a smaller down payment or buying mortgage points to soften the hit.

» MORE: Is it a good time to buy a house?

🤓 Kate on Rates: August 27, 2026

September mortgage rates forecast

The outlook still isn't great for buyers hoping for relief. Middle East tension remains the biggest wildcard — rates have moved in lockstep with the war since it began, and that's unlikely to change without a resolution.

Fed Chair Kevin Warsh's hawkish inflation stance and preference for fewer public comments have also left markets on edge, and whether the Fed acts or holds steady, both paths could push rates higher. Best case: a few more weeks of stability, or a surprise Iran ceasefire — though after the last deal fell apart, markets aren't holding their breath.

» MORE: How the Fed affects mortgage rates

DATA: What's the Homebuying Climate this month?

NerdWallet's Homebuying Climate Index puts a familiar weather label on how favorable conditions are for home buyers.

For August, our analysis puts the Climate Index at 53.2 out of 100, keeping the index in Partly Cloudy territory for the 49th straight month as most variables hold relatively steady.

Read more about the factors affecting this month's index to gauge how they might affect your homebuying plans.

Explore NerdWallet's Homebuying Climate Index

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Mortgage Interest Rates Forecast

🤓 Kate on Rates: August 27, 2026

September mortgage rates forecast

DATA: What's the Homebuying Climate this month?

You're our first priority.
Every time.