Mortgage Rates Reach 6.69% Amid Hormuz Deal Hopes

Average rates for 30-year fixed home loans reached 6.69% for the week ending August 6, marking the highest level in over a year and a significant increase from the previous week's 6.66%. This figure represents a 3 basis point rise and is the first time in 10 months that mortgage rates have surpassed their year-ago levels, which stood at an average of 6.63% during the same period in 2025. Sam Khater, Freddie Mac's chief economist, stated that while mortgage rates continue to affect affordability, the housing market is demonstrating signs of adaptation. He noted that listing prices are modestly lower than the previous year and that the inventory of homes for sale has improved compared to the constrained supply observed in recent years. This latest increase in borrowing costs follows a volatile week in the bond market, where the 10-year Treasury yield briefly exceeded 4.7%, an 18-month high, before experiencing a slight decline. This pullback was attributed to renewed optimism surrounding potential peace negotiations between the U.S. and Iran, aimed at reopening the strategically vital Strait of Hormuz, a key transit route for global oil shipments. President Donald Trump indicated that negotiations were underway. However, Tehran has denied direct talks with the U.S., asserting that discussions are solely with Oman regarding the reopening of the Strait of Hormuz. Realtor.com® economist intern Glen Morgenstern observed that mortgage rates have been slow to reflect the decrease in Treasury yields. He anticipates that upcoming economic data, including Friday's unemployment report and next week's inflation figures, along with the resolution of the Hormuz negotiations, will be critical in determining whether this disparity between bond yields and mortgage rates narrows in the coming weeks. Morgenstern also commented on the bond market's recent fluctuations, linking them to the Federal Reserve's current policy stance, which he described as difficult to interpret within a macroeconomic context lacking a clear policy direction. The Federal Open Market Committee (FOMC) maintained interest rates unchanged at its July meeting, with a 9-3 voting outcome.