Author: Craig Kamman, Edina Realty | Wayzata, MN | Phone: 952-994-4451
Published: Wednesday, August 26, 2026
Current Rate Snapshot
| Loan Type | Current Rate | Change (Week over Week) |
|---|---|---|
| 30-Year Fixed | 6.65% | -0.02% |
| 15-Year Fixed | 5.95% | -0.06% |
| Jumbo (30Y Fixed) | ~6.78% | +0.02% |
| 5/1 ARM | ~6.22% | Bankrate survey |
| 10/1 ARM | ~6.58% | Bankrate survey |
Sources: Freddie Mac PMMS (August 20), Bankrate (August 24-26)
Key metric: The spread between the 30-year fixed rate and the 10-year Treasury sits at 1.99% — still well above the ~1.70% historical average, but narrowing slightly as mortgage rates ease faster than Treasury yields this week.
Treasury Trend (6 Months)
The 10-year Treasury yield is at 4.66% this morning — down from 4.74% last Friday, the high end of a choppy two-week range (4.62%-4.74%). The 2-year sits at 4.38%, keeping the yield curve mildly positive (+0.28). Over the past month the 10-year is up about 6 basis points, and over the past six months it has climbed from roughly 3.96% in late February — a more than 70-basis-point rise.
Mortgage Spread vs. Historical Average
The spread between the 30-year fixed and the 10-year Treasury is 1.99%, down slightly from 2.00% last week but still nearly 30 basis points above the ~1.70% historical average. Lenders’ margins remain wide — which is why mortgage rates aren’t falling as fast as Treasury yields when bonds rally.
Market Context: The Fed Story Has Flipped — Again
Two weeks ago, a soft July jobs report had traders betting the Fed would hold in September and easing off hike talk. That narrative is gone. Here’s what changed:
- July PCE came out this morning (8:30am ET): headline inflation at 3.7% year-over-year — unchanged from June, with core PCE at 3.3% and hotter than expected. Energy prices, driven by the conflict in Iran, are the main culprit.
- July CPI (August 12): 3.4% annual — stubborn, not cooling.
- New Fed leadership, same inflation fight. Kevin Warsh’s first Jackson Hole speech as Fed Chair (last Friday) had investors parsing his commitment to getting inflation down after years of overshooting the 2% target. The New York Times summed up the mood: the “honeymoon’s over,” and the Fed is under pressure as it weighs raising rates.
- Markets now price the September 16 FOMC as roughly 70% hold / 28-30% hike / ~1% cut (Kalshi & Polymarket contracts). Cut odds are essentially zero into year-end.
The takeaway: the Fed is no longer in “when do we cut?” territory. It’s a genuine hold-vs-hike debate — the first time in this cycle that a hike is being priced as a real possibility again.
Twin Cities Local Impact
July 2026 Housing Data (Source: MAAR / Minnesota Realtors)
| Metric | July 2026 | Change vs. Year Ago |
|---|---|---|
| Median Sales Price (Metro) | $408,000 | +3.3% |
| Pending Sales (Metro) | +3.0% | +3.0% |
| Closed Sales (Metro) | +10.5% | +10.5% |
| New Listings (Metro) | +8.0% | +8.0% |
| Months of Supply (Metro) | 3.0 months | Highest in ~10 years |
Statewide: median $375,000 (+2.7%), 20,084 active listings — a seven-year high; sellers averaged 99.1% of asking in the metro (98.3% statewide).
What This Means for Buyers & Sellers
The market keeps tilting toward balance. July’s median of $408,000 slipped a couple thousand off June’s record $410,000 — but the year-over-year gain actually accelerated to +3.3%, the strongest appreciation pace in months. Pending sales are up 3% from a year ago, closed sales jumped 10.5%, and inventory has reached its highest level in about a decade.
For buyers, this is the best supply picture since before the pandemic. Three months of inventory means real choices and real negotiating room — and sellers are still getting 99.1% of asking, so the days of automatic bidding wars are mostly behind us in the metro. The payment math is the same headache, though: at 6.65% on a $408,000 home with 20% down, you’re looking at roughly $2,090/month before taxes and insurance.
For sellers, price it right. Buyers are rate-sensitive and inventory is up — homes that are priced fairly are still moving, but overpriced listings sit. The 3.3% appreciation pace tells you demand is still there; it just won’t chase a bad price anymore.
Bottom Line / Takeaway
Mortgage rates are drifting slightly lower (30-year at 6.65%) just as the Fed’s conversation turns back toward hiking. The July PCE number released this morning — 3.7% headline, hotter-than-expected core — plus Fed Chair Warsh’s hawkish tone have markets pricing the September 16 meeting as a choice between hold (~70%) and hike (~28-30%). Cut odds: basically zero.
For buyers: The window logic hasn’t changed — it’s gotten more urgent. If the Fed’s next move is a hike rather than a hold, rates go up from here, not down. Inventory is the best it’s been in a decade; if the numbers work at 6.65%, don’t gamble on a better rate this fall. Lock when it makes sense, refinance later if the market cooperates.
For sellers: The balance is shifting. More supply, 3.0 months of inventory, buyers with rate fatigue. The winning play is the same as it’s been all year: price it right on day one, and you’ll still get 99% of asking in about the same days-on-market as last year.
For refinancers: This is not your moment. With hike odds back on the table and rates a full point above the early-2026 lows, the refinance window depends on inflation breaking decisively lower — and this morning’s PCE went the other way.
What to Watch This Week
- Thursday, August 27 — Freddie Mac PMMS. The first weekly rate read after this morning’s PCE print. Does 6.65% hold, or do bonds push mortgage rates back up?
- Friday, August 28 — Revised consumer sentiment + Fed speakers. Markets will be digesting PCE all week; any Fed commentary on the hot core reading moves the hike odds.
- Friday, September 4 — August Jobs Report (8:30am ET). The last big employment number before the FOMC. A strong print + hot inflation = hike odds climb; a soft print reopens the hold debate.
- Wednesday, September 16 — FOMC Decision. The pivot point. Right now the market says ~70% hold / ~29% hike. Every data point between now and then shifts those odds.
Need Mortgage Guidance?
Navigating today’s market — whether you’re buying, selling, or refinancing — requires local expertise and real-time rate intelligence.
Call or text Craig Kamman
☎ 952-994-4451
Edina Realty | Wayzata, MN
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Disclaimer: The information provided in this report is for informational purposes only and does not constitute financial or mortgage advice. Rates are subject to change based on market conditions, credit profile, loan-to-value, and other factors. Always consult with a licensed mortgage professional for current rate quotes. Data sources include Freddie Mac PMMS, Bankrate, CME FedWatch, Kalshi, Polymarket, the Federal Reserve, BLS, BEA, Minnesota Realtors, and MAAR.