What happened to mortgage rates this week?
The Freddie Mac 30-year mortgage rate ticked up 2 basis points this week to 6% after falling below 6% last week for the first time in over three years. The launch of the conflict in Iran over the weekend and its subsequent escalation have stoked fears of wartime inflation that are driving the 10-year Treasury yield higher, and we expect mortgage rates to follow suit. Mortgage rates had been on a steady decline since last summer, when they registered in the high 6% range, and this week’s readout will be much lower than a year ago at this time when they came in at 6.63%, but it is still a bit disappointing to have spent only one week in the 5% territory. For rates to continue their descent in 2026, we will need clear signals in the months to come that this conflict is not driving up prices for consumers at home. Given the major jump in oil prices this week and the increased shipping costs that go with that, this positive news on inflation may be hard to come by.
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What does this mean for the housing market?
The housing market badly needs these low mortgage rates, both to spur buyer activity in a period when sales activity is slow even for the market’s off-season and to mitigate the lock-in effect and add supply to a market that’s increasingly made up of homes that have been around for a while rather than fresh new listings so far in 2026. Market conditions have been shaping up nicely for buyers: Prices are down, inventory is up, and mortgage rates are well below last year’s levels. So far this year, though, these conditions have not translated into boosted sales activity, and consumer confidence is to blame. Economic uncertainty is not a position from which many people are interested in making the largest purchase of their life, and the conflict in Iran just added to the anxiety pile that already included tariffs, last year’s soft labor market, stock market volatility, and AI job loss concerns. These relatively low mortgage rates help alleviate affordability issues for buyers, but buyers have quite a bit else on their minds as well.
