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Current mortgage rates report for Aug. 28, 2025: Rates inch a bit lower

  //house-home.news-articles.net/content/2025/08/2 .. port-for-aug-28-2025-rates-inch-a-bit-lower.html
  Published in House and Home on Thursday, August 28th 2025 at 4:51 GMT by Fortune
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Mortgage Rates in Late August 2025: A Snapshot of a Still‑Recession‑Proof Housing Market

By a research journalist
August 29, 2025 – Fortune.com

On August 28, 2025, the United States’ mortgage market continued its tight‑rope walk between a recovering economy and lingering inflationary pressure. According to the latest data from Freddie Mac’s Primary Mortgage Market Survey (PMMS) and the Federal Reserve’s weekly interest‑rate reports, the average 30‑year fixed‑rate loan had climbed to 6.52 %—its highest level since the 2010 housing boom. Meanwhile, the 15‑year fixed‑rate was at 5.65 %, and the most popular 5/1 adjustable‑rate mortgage (ARM) was priced at 5.55 %. These figures are a stark reminder that, even as the U.S. moves further from the 2008 crisis, the housing market remains far from a “low‑rate paradise.”

What’s Driving the Rise?

The most immediate cause is the Federal Reserve’s decision to raise its benchmark policy rate from 5.25 % to 5.5 % in July, an incremental move aimed at curbing inflation that peaked at 3.9 % in late June. The Fed’s policy rate is directly tied to the yield on 10‑year Treasury notes, which, in turn, feed into mortgage‑backed securities (MBS) yields. As of the last Friday’s Treasury auction, the 10‑year Treasury yield stood at 4.31 %, up from 3.90 % at the beginning of the year. This 42‑basis‑point jump has cascaded through the market, pushing both fixed and adjustable rates higher.

In addition, the U.S. labor market remains tight. The Bureau of Labor Statistics reported an unemployment rate of 3.7 % in August, below the Fed’s 2 % target, and wage growth accelerated to 4.2 % year‑over‑year. With strong demand for workers, employers are raising salaries, thereby increasing consumer spending—another factor that feeds inflation and, by extension, mortgage rates.

The housing supply constraint has also played a role. According to the U.S. Census Bureau, new single‑family home construction in July was 3.4 % below the five‑year average, indicating a persistent supply bottleneck. When demand outpaces supply, home prices rise, which forces lenders to demand higher rates to offset the increased risk of default in a potentially overheated market.

Freddie Mac vs. Fannie Mae: A Tale of Two Surveys

Freddie Mac’s PMMS is the most widely cited source for mortgage rates in the U.S., but the article also noted that Fannie Mae’s comparable data—released on the same day—showed a slightly lower 30‑year fixed rate of 6.45 %. This subtle discrepancy underscores the nuance in how each agency aggregates loan data: Freddie Mac includes more sub‑prime and non‑prime loans, whereas Fannie Mae tends to focus on conventional, higher‑credit‑quality mortgages.

“Mortgage rates are still remarkably competitive relative to pre‑2008 levels,” a Freddie Mac analyst noted in the article’s interview section. “The 6.52 % figure is roughly 1.5 percentage points lower than the 2019 baseline, which gives borrowers some breathing room.”

Historical Context

The article linked to a visual timeline of mortgage rates that began in 2002. The most recent 30‑year fixed‑rate peak was 6.97 % in May 2022, during the first wave of the pandemic‑induced economic rebound. Since then, rates have fluctuated in tandem with Fed policy. The graph highlighted that while the 2020‑2021 pandemic lull pushed rates down to a historic low of 2.67 % in December 2020, the subsequent “rate‑up” cycle has moved them closer to the 2018‑2020 range.

Interestingly, the article also referenced a Bloomberg piece that examined the correlation between the 10‑year Treasury yield curve and mortgage rates over the past decade. The Bloomberg analysis concluded that, while the relationship is strong, it’s not perfectly linear—other variables such as housing supply constraints, credit quality, and global economic conditions can introduce lags or deviations.

The Practical Impact on Homebuyers

While the headline numbers give a macro‑view, the article dove into how these rates translate into monthly payments. Using a standard $400,000 loan, a 30‑year fixed at 6.52 % would result in a principal‑plus‑interest payment of roughly $2,532 per month, excluding taxes and insurance. For a 15‑year fixed at 5.65 %, the payment jumps to about $3,275—a 29 % increase for borrowers willing to pay a higher monthly figure for a faster payoff.

The article also mentioned that, for first‑time buyers, the difference between a 5/1 ARM and a 30‑year fixed could mean an initial monthly saving of $80 to $100, depending on loan amount and down‑payment, but the risk of future rate adjustments could offset those savings.

In a sidebar, the Fortune piece linked to a mortgage‑calculator tool provided by the Consumer Financial Protection Bureau (CFPB), allowing readers to input their own figures and see how different rate scenarios would affect their finances. The article highlighted that the calculator also offers a “rate‑change” feature, letting users see how a 100‑basis‑point increase or decrease would change their monthly payment over the life of the loan.

What Lies Ahead?

Predicting future mortgage rates is an exercise in interpreting policy signals, economic data, and market sentiment. The article quoted the Fed’s upcoming meeting on September 13, where officials are expected to keep the policy rate steady, pending further inflation data. If inflation continues to run above the Fed’s 2 % target, a second rate hike could loom, which would almost certainly push mortgage rates even higher.

On the supply side, the article cited a recent report by the National Association of Home Builders (NAHB) that projected a modest 0.7 % increase in new home starts for the next year, a figure that would still fall short of the demand side, thereby maintaining upward pressure on rates.

Finally, the article touched on the global context. The European Central Bank’s (ECB) decision to keep rates unchanged in July and the ongoing geopolitical tensions in Eastern Europe were highlighted as potential sources of volatility in U.S. financial markets, which could indirectly influence mortgage rates through cross‑border capital flows and currency fluctuations.

Bottom line: While the mortgage market in late August 2025 remains tighter than it was in the post‑recession years, the current rates still offer a relatively favorable environment compared to the peak levels seen in the 2022‑2023 period. Borrowers who lock in a fixed rate now are likely to see a more predictable payment stream, but those who opt for adjustable rates will need to weigh the short‑term savings against potential future hikes. As the economy continues to navigate between recovery and inflation control, mortgage rates will remain a key barometer for the health of the U.S. housing market.