Despite higher oil and gas prices, higher mortgage rates and no indication that the conflict in Iran is ending, existing home sales still posted another positive week.
However, with every week that goes by with mortgage rates above 6.25% and heading higher, it gets harder to maintain that growth, and housing data in the past hasn’t performed well when mortgage rates pass 6.64% and then exceed 7%. However, for last week, the demand was fine, even with the crazy headlines we had.
This week is going to be critical because I have maintained that if this crisis lasts past March 21, everyone needs to revise their housing outlook as rates being higher for longer is in play now.
Weekly pending sales
Pending home sales data provides a week-to-week perspective, though results can be affected by holidays and short-term fluctuations. The last five weeks have been positive in our weekly pending sales data. We shall see if that moves forward, especially now that rates hit a yearly high and they could continue higher this week.
Weekly pending sales usually take 30-60 days to hit the sales data. Typically, mortgage rates above 6.64% and breaking over 7% really impact the data. Under 6.25% is where the sweet spot has been in the past several years, excluding short-term variables out of the equation.
Weekly pending sales last week over the last two years:
- 2026: 71,230
- 2025: 68,726
Mortgage purchase application data
Purchase application data is a forward-looking data line: the growth here leads home sales roughly 30-90 days out, and last week we saw 12% year-over-year growth with 1% week-to-week growth. Weekly growth cooled last week and this week we are at risk of a negative weekly print. This does happen often when you have back-to-back weeks of rising rates.
For this data line, what I really value is at least 12-14 weeks of positive weekly growth. If you can get this alongside year-over-year growth, we have something legit, for sure. For 2026, every week has shown positive year-over-year growth. The week-to-week data has been positive; however, that’s much easier to do with rates under 6.25%.
Here’s 2026 so far:
- 5 positive week-over-week prints
- 4 negative week-to-week prints
- 1 flat week-to-week print
- 7 weeks of double-digit year-over-year growth
- 10 weeks of positive year-over-year growth
10-year yield and mortgage rates
In the 2026 HousingWire forecast, I anticipated the following ranges:
- Mortgage rates between 5.75% and 6.75%
- The 10-year yield fluctuating between 3.80% and 4.60%
When the Iran conflict started, I talked about how I would be shocked if it continued past March 21 because of the economic implications of war, including higher energy and input costs. Friday, March 20, the bond market took the conflict more seriously and, for the first time since September of 2025, the 10-year yield closed above 4.31%. The bond market has now priced out all rate cuts and is now pricing in a rate hike in 2026.
This week is key to me because we now have a clear pathway to the 10-year yield hitting 4.60% — the high end of my forecast. If this conflict continues and worsens, bond yields will rise and more rate hikes will be priced in.
Mortgage spreads
Mortgage spreads remain a positive story for housing in 2026, reducing mortgage-rate volatility, and are close to normal levels. Mortgage spreads got slightly worse when bond yields were falling in February, as the spreads were trying to make mortgage rates less volatile with falling yields. Now they have gotten worse with this conflict as well.
For now, the spreads are still very positive, but their improvement is the only thing keeping rates from being over 7% again.
Historically, mortgage spreads have ranged from 1.60% to 1.80%. Last week’s spreads closed at 1.97%. Again, Friday’s single-day spread is not accounted for in this weekly data.
However, I wanted to show this week’s rates relative to the worst levels of the spreads over the past three years, with the 10-year yield at its current level.
- If we had the worst levels of mortgage spreads in 2023, mortgage rates would be 7.67% today, not 6.53%
- If we had the worst levels of 2024, mortgage rates would be 7.29% today.
- If we had the worst levels of 2025, mortgage rates would be 7.10% today.
Weekly housing inventory data
Housing inventory should now be starting its annual seasonal increase. However, the growth rate of inventory has really slowed from last year’s peak levels, to the point that we might see some negative year-over-year prints in our weekly inventory. Still, we are still far from the unhealthy levels of 2021, 2022 and 2023.
We have gone from 33% year-over-year growth in inventory at the highest point in 2025, to 6.35% last week. In the past, inventory growth picked up amid higher rates, softening demand and rising year-over-year new listings. New listings data is still negative year over year, but for this week, it’s a good start to the spring seasonal increase.
- Weekly inventory change: (March 13-March 20): Inventory rose from 697,251 to 705,633
- Same week last year: (March 14-March 21): Inventory rose from 655,625 to 668,155
New listings data
New listings data has also been slightly disappointing this year. While I still believe we can get a few weeks over 80,000, the year-over-year growth rate has been slightly negative for weeks now.
I am still hoping for the new listings data to range between 80,000 and 100,000 per week during the seasonal peak periods, as it did from 2013-2019. For context, during the housing bubble crash, new listings ranged from 250,000 to 400,000 per week for several years.
Here is last week’s new listings data for the past two years:
- 2026: 68,016
- 2025: 69,701
Price-cut percentage
Typically, about one-third of homes undergo price reductions before they sell, reflecting the dynamic nature of the housing market. As mortgage rates and inventory rise together, the percentage of price cuts increases.
In my 2026 price forecast, I had a negative 0.62% call for the year nationally.
However, mortgage rates were lower than I thought they would be at the start of the year and the FHFA’s announced purchase of mortgage-backed securities pushed mortgage spreads lower than I expected. I believed we would see that improvement later on in the year. So, before the conflict started, my forecast looked wrong for 2026. Now, if rates head higher and stay higher for longer, I do have a shot at my call being more correct. Still, the price cut percentage is below last year at this time.
The price-cut percentage for last week:
- 2026: 33.80%
- 2025: 34%
The week ahead: Iran, Iran, Iran and Iran
Nothing matters this coming week but Iran. Last week we broke a key level on the 10-year and the entire calendar year is now being shaped by higher rates, higher inflation and no rate cuts. In fact, rate hikes are now back in the discussion for 2026. If this conflict gets worse, we can get more rate hikes priced in for 2026, and no Fed member will talk about rate cuts unless we go into a hardcore recession. So for now, the Iran conflict is shaping what the rest of 2026 will look like for the economy and the housing market.