Mortgage rates rose Friday, with the 30-year fixed at 6.71% and the 5/1 ARM surging to 7.03% on Zillow data, as the August jobs report looms and refinance activity climbs 62% year over year.
Zillow is the data source behind Friday's mortgage rate report, so its earnings are directly tied to housing transaction volume. The 30-year fixed rate rose to 6.71% and the 5/1 ARM surged 39 bps to 7.03%, which typically pressures home affordability and purchase demand. Higher rates cloud the near-term housing outlook, though refinance applications are up 62% year over year.
Higher rates reduce home purchase affordability and can slow transaction volume, which weighs on Zillow's real estate marketplace and mortgage referral revenue. Friday's ARM surge to 7.03% reinforces that affordability pressure.
Refinance demand is still strong, with applications up 62% year over year, and mortgage rates remain more than half a point below late-May levels. If the August jobs report triggers lower rates, Zillow could see continued activity.
Mortgage rates track long-term Treasury yields, and Friday's jump in the 30-year fixed rate to 6.71% signals upward pressure on the 10-year yield ahead of the August jobs report. ARM rates surged 39 bps, implying borrowing costs are pricing in potential volatility if payrolls come in hot. MBA and Fannie Mae forecasts point to 30-year rates staying near 6.6%-6.8%, keeping Treasury yields rangebound.
Mortgage rates are priced off mortgage-backed securities and long-term Treasuries, so a 2-39 bps move in mortgage rates usually reflects underlying bond yield pressure. Friday's ARM surge points to investors positioning for a hot jobs report.
MBA and Fannie Mae expect 30-year mortgage rates to stay in a 6.6% to 6.8% range through 2026, implying rangebound long-term Treasury yields unless the jobs report changes Fed policy expectations.
The average 30-year fixed mortgage rate ticked up 2 basis points to 6.71%, while 5/1 ARM rates jumped 39 basis points to 7.03% on Zillow data, as markets eye Friday's August jobs report. The 15-year fixed rate rose 14 basis points to 6.14%. ARM rates running above fixed-rate mortgages signal borrowing-cost stress, even as mortgage rates remain more than half a point below late-May levels and refinance applications climb 62% year over year.
Fixed and adjustable rates moved higher Friday as markets positioned for the August jobs report, which could shape Federal Reserve policy expectations. ARM rates jumped 39 basis points, suggesting borrowers and lenders are bracing for possible volatility in long-term rates.
The average 30-year fixed rate is 6.71%, up from 6.50% a year ago. Rates remain more than half a point below their late-May peak, helping fuel a 62% year-over-year jump in refinance applications.
The MBA projects the 30-year mortgage rate to average between 6.6% and 6.7% for the rest of 2026. Fannie Mae forecasts 6.7% to 6.8%. Both see rates staying little changed through 2027.