Housing demand still growing as mortgage rates reach inflection point

Weekly pending gross sales

Pending house gross sales information gives a week-to-week perspective, though outcomes may be affected by holidays and short-term fluctuations. The final 5 weeks have been constructive in our weekly pending gross sales information. We shall see if that strikes ahead, particularly now that rates hit a yearly excessive they usually might proceed increased this week.

Weekly pending gross sales often take 30-60 days to hit the gross sales information. Typically, mortgage rates above 6.64% and breaking over 7% actually impression the information. Under 6.25% is the place the candy spot has been up to now a number of years, excluding short-term variables out of the equation.

Weekly pending gross sales final week during the last two years:

• 2026: 71,230
• 2025: 68,726

Mortgage buy software information

Purchase software information is a forward-looking information line: the expansion right here leads house gross sales roughly 30-90 days out, and last week we noticed 12% year-over-year development with 1% week-to-week development. Weekly development cooled final week and this week we’re liable to a unfavorable weekly print. This occurs usually when you have got back-to-back weeks of rising rates.

For this information line, what I actually worth is no less than 12-14 weeks of constructive weekly development. If you will get this alongside year-over-year development, we have now one thing professional, for certain. For 2026, each week has proven constructive year-over-year development. The week-to-week information has been constructive; However, that is a lot simpler to do with rates below 6.25%.

Here’s 2026 to date:

• 5 constructive week-over-week prints
• 4 unfavorable week-to-week prints
• 1 flat week-to-week print
• 7 weeks of double-digit year-over-year development
• 10 weeks of constructive year-over-year development

10-year yield and mortgage rates

In the 2026 HousingWire forecastI anticipated the next ranges:

• Mortgage rates between 5.75% and 6.75%
• The 10-year yield fluctuating between 3.80% and 4.60%

When the Iranian battle began, I talked about how I’d be shocked if it continued previous March 21 due to the financial implications of battle, together with increased vitality and enter prices. Friday, March 20, the bond market took the battle extra severely and, for the primary time since September of 2025, the 10-year yield closed above 4.31%. The bond market has now priced out all price cuts and is now pricing in a rate hike in 2026.

This week is essential to me as a result of we now have a transparent pathway to the 10-year yield hitting 4.60% — the excessive finish of my forecast. If this battle continues and worsens, bond yields will rise and extra price hikes shall be priced in.

Mortgage spreads

Mortgage spreads stay a positive story for housing in 2026, decreasing mortgage-rate volatility, and are near regular ranges. Mortgage spreads acquired barely worse when bond yields had been falling in February, as the spreads had been making an attempt to make mortgage rates much less risky with falling yields. Now they’ve gotten worse with this battle as properly.

For now, the spreads are still very constructive, however their enchancment is the one factor protecting rates from being over 7% once more.

Historically, mortgage spreads have ranged from 1.60% to 1.80%. Last week’s spreads closed at 1.97%. Again, Friday’s single-day unfold will not be accounted for on this weekly information.

However, I wished to indicate this week’s rates relative to the worst ranges of the spreads over the previous three years, with the 10-year yield at its present degree.

• If we had the worst ranges of mortgage spreads in 2023, mortgage rates could be 7.67% right now, not 6.53%
• If we had the worst ranges of 2024, mortgage rates could be 7.29% right now.
• If we had the worst ranges of 2025, mortgage rates could be 7.10% right now.

Weekly housing stock information

Housing inventory ought to now be beginning its annual seasonal enhance. However, the expansion price of stock has actually slowed from final yr’s peak ranges, to the point that we’d see some unfavorable year-over-year prints in our weekly stock. Still, we’re still removed from the unhealthy ranges of 2021, 2022 and 2023.

We have gone from 33% year-over-year development in stock on the highest point in 2025, to six.35% final week. In the previous, stock development picked up amid increased rates, softening demand and rising year-over-year new listings. New listings information is still unfavorable yr over yr, however for this week, it is a good begin to the spring seasonal enhance.

• Weekly stock change: (March 13-March 20): Inventory rose from 697,251 to 705,633
• Same week final yr: (March 14-March 21): Inventory rose from 655,625 to 668,155

New listings information

New listings information has additionally been barely disappointing this yr. While I still imagine we will get just a few weeks over 80,000, the year-over-year development price has been barely unfavorable for weeks now.

I’m still hoping for the brand new listings information to vary between 80,000 and 100,000 per week through the seasonal peak durations, as it did from 2013-2019. For context, through the housing bubble crash, new listings ranged from 250,000 to 400,000 per week for a number of years.

Here is final week’s new listings information for the previous two years:

• 2026: 68,016
• 2025: 69,701

Price-cut proportion

Typically, about one-third of properties bear value reductions earlier than they promote, reflecting the dynamic nature of the housing market. As mortgage rates and stock rise collectively, the share of value cuts will increase.

In my 2026 value forecast, I had a unfavorable 0.62% name for the yr nationally.

However, mortgage rates had been decrease than I assumed they’d be at first of the yr and the FHFA’s introduced purchase of mortgage-backed securities mortgage spreads pushed decrease than I anticipated. I believed we’d see that enchancment in a while within the yr. So, earlier than the battle began, my forecast seemed incorrect for 2026. Now, if rates head increased and keep increased for longer, I do have a shot at my name being extra appropriate. Still, the value minimize proportion is beneath final yr at the moment.

The price-cut proportion for final week:

The week forward: Iran, Iran, Iran and Iran

Nothing issues this coming week however Iran. Last week we broke a key degree on the 10-year and the complete calendar yr is now being formed by increased rates, increased inflation and no price cuts. In truth, price hikes are actually again within the dialogue for 2026. If this battle will get worse, we will get extra price hikes priced in for 2026, and no Fed member will discuss price cuts until we go right into a hardcore recession. So for now, the Iranian battle is shaping what the remainder of 2026 will seem like for the economic system and the housing market.