Mortgage rates increased in August as Treasury yields remained elevated amid persistent inflation concerns. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.67% in August, up 13 basis points (bps) over July. Since the conflict in the Middle East began, the 30-year mortgage rate has jumped by more than 60 bps. The average 15-year rate averaged 5.98% in July, up 7 bps from July and 55 bps from the end of February. Mortgage rates are now roughly on par with their levels a year ago, with the 30-year rate 6 bps higher and the 15-year rate 24 bps higher.

The 10-year Treasury yield, a key benchmark for long-term borrowing, rose 10 bps to an average of 4.68% in August, Yields rose in the later part of the month amid a broader selloff in global government bonds. Long-term government bond yields across several major economics climbed to multi-year highs in August, with the 30-year US Treasury yield reaching its highest level since 2007 and long-term yields in Japan and parts of Europe reaching levels not seen in decades. The global selloff reflected growing investor concerns about persistent inflation, rising government debt and heavy sovereign borrowing. Higher oil prices from the ongoing Iran conflict also added to inflation concerns.

Domestically, Treasury yields faced additional upward pressure following the Federal Reserve’s (Fed) annual Jackson Hole symposium. Federal Reserve Chair Kevin Warsh emphasized that inflation remained above the Fed’s 2% target, and that restoring price stability remained the Fed’s primary focus. His remarks reinforced market expectations that monetary policy could tighten later in the year.