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Mortgage Interest Rates Forecast

Mortgage rates fell to 6.55% APR this week as a Treasury move to double bond purchases raises questions about where rates head next.

Kate Wood
Dawnielle Robinson-Walker
Updated
Mortgage rates moved lower this week, but don't get too comfortable — a lot's still shifting under the surface. The average 30-year fixed-rate mortgage fell four basis points to 6.55% APR in the week ending Aug. 20, according to rates provided to NerdWallet by Zillow.
Looking ahead, we're watching the Treasury's bigger bond-buying push — now $4 billion a week, double the previous amount — and whether it's enough to pull yields (and mortgage rates) down further. Against a $40 trillion national debt, it might be too small to move the needle much.
For buyers already squeezed by high prices and everyday costs, that means rates could stay choppy rather than trend cleanly downward. One bright-ish spot: with pending home sales at their lowest since January, there's less competition and more room to negotiate.
» MORE: Is it a good time to buy a house?

🤓 Kate on Rates: August 20, 2026

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August mortgage rates forecast

The outlook for August 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 July, our analysis puts the Climate Index at 54.2 out of 100, keeping the index in Partly Cloudy territory for the 48th 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
Proprietary research based on the latest federal data

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