What happened to mortgage rates this week?
The Freddie Mac 30-year fixed mortgage rate climbed for the fifth consecutive week, rising 8 basis points to 6.46% as the ongoing conflict in Iran continues to roil financial markets. The recent ascent in rates translates to a monthly payment roughly $115 higher than buyers faced just a month ago, a meaningful shift in affordability calculated on a 10% down payment at March’s median home price. This fast-changing mortgage math, combined with general economic uncertainty, could keep more buyers on the sidelines as the typically busy spring market gets into full swing.
Â
Â
What does this mean for the housing market?
The March housing data shows a balanced national housing market. Home prices were either flat or falling year over year in 34 of the 50 largest U.S. metros. This means that sellers are adjusting expectations to current market conditions, and buyers in many areas have more negotiating power than they have had in years, a dynamic that could partly offset the affordability pressure from higher rates. Inventory continues to gradually improve, giving shoppers more options even as affordability concerns linger.
Looking ahead, further rate volatility will likely continue to hinder the housing market. However, President Donald Trump‘s recent statement about the potential end of the conflict in Iran was met by a swift response in Treasury yields and mortgage rates, which drifted lower. If the conflict is indeed coming to a close, mortgage rates are likely to continue their downward progress, returning some affordability to the market as wartime inflation fears subside. For now, buyers and sellers alike would be wise to stay nimble. Those who can act quickly when rates dip may find meaningful windows of opportunity in the months ahead.
