Market Update · August 25, 2026 · 7 min read
Treasury announced it would start buying back long-term bonds on September 9. The idea was simple: buy bonds, push yields down, mortgage rates follow.
Except mortgage rates went up instead.
According to HousingWire, 30-year conforming rates climbed to 6.92% this week. Jumbo loans—the ones my clients in Howard County and Montgomery County often need for homes over $806,500—hit 7.14%. That's not what anyone hoped for when Treasury Secretary Yellen announced higher per-operation limits for the buyback program last week.
Freddie Mac's latest survey from August 20 showed the 30-year fixed at 6.65%. We've moved 27 basis points higher in five days.
I spent twenty years teaching before I got into real estate, so let me break this down the way I would've explained supply and demand to my tenth graders.
Treasury buybacks mechanically reduce bond supply. Fewer bonds available should mean higher prices, which means lower yields, which should mean lower mortgage rates. That's the theory.
But the bond market doesn't care about theories when inflation is running at 3.5% year over year and the government deficit keeps growing. Oil prices spiked. The 30-year Treasury yield briefly hit a 19-year high earlier this month, according to Zillow Research. Then geopolitical news moved things around—yesterday oil dropped on peace negotiation rumors and yields came down a touch, but mortgage lenders had already set Friday's rates at better levels, so Monday's "improvement" in bonds didn't help borrowers.
The underlying forces—the deficit, energy shocks, inflation that won't quit—matter more than a buyback program.
So what does 6.92% actually mean if you're trying to buy a home in Baltimore County or sell a house in Harford County?
Let's start with what I'm seeing at open houses. Buyers are nervous. The ones who got pre-approved three weeks ago at 6.6% are now looking at monthly payments that jumped $80 to $150 depending on loan size. That's real money. A $400,000 loan at 6.65% costs about $2,562 per month in principal and interest. At 6.92%, it's $2,633. Over thirty years, that's an extra $25,560.
Sellers in Cecil County and Anne Arundel County are stuck in a weird spot. You hoped rates would drop and bring more buyers off the fence. Instead, rates went up and the buyer pool just got smaller again.
Redfin reported last Friday that 14% of U.S. homebuying deals fell through in July—the highest share since November 2023. When buyers have power, they walk. They're not desperate. I wrote about that last week, and the rate jump this week just gave them another reason to stay cautious.
Here's the other piece of the puzzle. Redfin data shows new listings climbed 1.2% week over week during the four weeks ending August 16. Fifth straight week of increases. More inventory is good for buyers, bad for sellers who now face more competition.
But pending sales? Lowest level since March, driven by "high housing costs and economic uncertainty."
That tracks with what I'm seeing in York County, PA, and Baltimore City. Listings sit a little longer. Buyers tour more homes before they write an offer. The sellers who price aggressively and make their homes show-ready are still getting multiple offers, but the ones who test the market at 5% over comp value are cutting prices within two weeks.
Realtor.com reported today that new-home prices plunged to a five-year low as sales falter. Builders are offering concessions. If you're a buyer in Howard County or New Castle County, Delaware, that's worth exploring—especially if you're looking at townhomes or single-family new construction.
National home prices hit 336.66 on the Case-Shiller index in June, per HousingWire, up 0.4% month over month. That's slower than inflation, which ran 3.5% year over year, but it's still growth.
Realtor.com's analysis today pointed out that Chicago, New York, and Cleveland posted big gains, fueled by tight supply in the Midwest and Northeast. We're seeing some of that dynamic in parts of Maryland—Charles County and Prince George's County have fewer listings than this time last year, and that's keeping prices from falling even as buyer demand softens.
But here's the thing: when I talked about the break-even clock for rent vs. buy yesterday, I pointed out that Zillow Research found a typical household needs about 15 years to save for and come out ahead on a home purchase compared to renting. If rates stay near 7% and home prices keep inching up, that clock gets longer. Not everywhere—markets vary—but it's something my first-time buyers in Baltimore City and Montgomery County need to run the numbers on.
Don't panic. Don't freeze. But do get realistic.
If you were waiting for 5.5% rates, that's not happening in 2026. The Federal Reserve held rates steady in July, and three policymakers actually pushed for a hike. Chair Warsh speaks at Jackson Hole this Friday, and markets are watching, but nothing he says is likely to cut mortgage rates by a full point overnight.
Rates in the high 6% range are the environment. Shop it. I had a buyer last month who assumed all lenders were quoting the same rate—turned out one credit union came in 0.375% lower because of a special program for healthcare workers. She's a nurse at University of Maryland Medical Center. That saved her $120 a month.
Also, get pre-approved now with current rates, not the rate you wish existed. I've watched buyers tour homes in Harford County for weeks, fall in love with a property, then discover their max budget dropped $30,000 because rates moved. Know your number before you start looking at current listings.
And if you're serious, be ready to move fast on the right house. Inventory is up, yes, but well-priced homes in good condition are still getting multiple offers in Bel Air, Fallston, and Towson. Hesitation costs you when three other buyers are writing offers the same weekend.
Price it right the first time. I know you want to "test the market" or "leave room to negotiate." But buyers in Anne Arundel County and Lancaster County, PA, have options right now. If your home is overpriced, they'll tour it, say "nice but not at that number," and move on to the next one.
The homes I've listed in the past month that went under contract in under ten days all had three things in common: priced at or slightly below recent comps, move-in ready, and great photos. The ones that sat for three weeks were priced 4-7% high or needed obvious work the seller didn't want to address.
If you're thinking about selling in the next few months, mid-September is Baltimore's sweet spot according to Redfin's seasonal data. But that window only works if you're ready to list by early September and your home is competitive.
One more thing: if you've been counting on a buyer to overlook deferred maintenance because "the market's hot," that script flipped. It's a buyer's market in many Maryland submarkets right now. Fix the loose railing. Paint the scuffed walls. Replace the stained carpet. Small money upfront saves you bigger concessions at the negotiating table.
Treasury tried. The buyback program starts September 9, and maybe it'll have some effect over time. But the bond market is driven by forces bigger than one policy tool—deficits, inflation, oil shocks, geopolitical risk.
Mortgage rates are going to stay elevated until inflation genuinely cools and the Fed feels confident enough to cut the federal funds rate. That might happen in 2027. It might not.
So if you're waiting to buy or sell until conditions are "perfect," you're going to wait a long time. The Maryland, DC, Pennsylvania, and Delaware markets I serve are workable right now—you just need the right price, the right strategy, and realistic expectations.
I've helped buyers close in worse environments than this. I've helped sellers get top dollar when headlines screamed doom. It's doable. You just need to understand what you're working with.
If you want to talk through your specific situation—whether you're looking at homes for sale in Baltimore County, trying to sell your house in York County, or figuring out the break-even math on a townhome in DC—let's talk. I'll give you the honest numbers, not the sales pitch.
Katrina Kirton Sherrod, REALTOR® · Samson Properties · Licensed in MD, DC, PA & DE · 443-616-9770 · Katrina@kkstherealtor.com
“Ninety percent of all millionaires become so through owning real estate.” — Andrew Carnegie