Housing demand holds up despite mortgage rates at yearly highs

As shocking as it may seem with all the crazy things that have happened in 2026 — AI labor disruption headlines, epic snowstorms and especially the Iran conflict — housing demand, even last week, still showed year-over-year growth with mortgage purchase applications data and our weekly pending home sales. However, that growth has slowed and we are at a key inflection point for mortgage rates.

Over the past few years, anytime mortgage rates fell below 6.64% and headed toward 6%, housing demand always improved. This happened in late 2022 to early 2023, mid 2024 and mid 2025. However, it works the other way too: when mortgage rates go above 6.64% and head over 7%, demand turns negative. So, with that in mind and against the backdrop of global economic disruption, let’s take a look at the weekend Housing Market Tracker data.

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 six weeks have shown positive yearly growth. However, the yearly growth did slow down last week and the week-to-week data dipped.

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% has been the sweet spot over the past several years, excluding short-term variables.

Weekly pending sales last week over the last two years:

• 2026: 70, 209
• 2025: 69,183

Mortgage purchase application data

Purchase application data is a forward-looking indicator: growth here leads home sales by roughly 30-90 days. Last week, we did see year-over-year growth, but it slowed from 12% to 5%, and we saw a week-to-week decline of 5%. So, higher mortgage rates bit into the yearly growth data last week.

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.

Here’s 2026 so far:

• 5 positive week-over-week prints
• 5 negative week-to-week prints
• 1 flat week-to-week print
• 7 weeks of double-digit year-over-year growth
• 11 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. The longer the conflict goes on, the higher short-term rates can go until we see real economic damage.

In last weekend’s tracker, I talked about how the 10-year yield has the backdrop now to head back to the peak levels of my forecast for 2026. Due to the Iran escalation, we saw an intraday high of 4.48% on Friday, closing around 4.44%. Mind that we were sub-4% before the war started, and it took a few weeks before the mortgage rates and the 10-year yield started to take this war more seriously, but here we are, close to the peak of the 2026 forecast.

Obviously, the war wasn’t the reason I forecast this level, but all analysts have to adjust to crazy events.

Mortgage rates ended the week at 6.64%, according to Mortgage News Daily, and Polly’s mortgage rate lock data shows a weekend rate of 6.41%.

Mortgage spreads

Mortgage spreads remain a positive story for housing in 2026, as mortgage rates would have easily been over 7% in 2023, 2024 and 2025, with the worst levels of the spreads. However, the spreads, which were getting worse in February as yields fell, compressing volatility on the downside, are now heading higher with this war. But even now, as you can see below, we are still at better levels than the past two years.

Historically, mortgage spreads have ranged from 1.60% to 1.80%. Last week’s spreads closed at 2%.

However, I wanted to show what rates would be this week compared 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 7.75% today, not 6.64%.
• If we had the worst levels of 2024, mortgage rates would be 7.37% today.
• If we had the worst levels of 2025, mortgage rates would be 7.18% today.

Weekly housing inventory data

Housing inventory is starting its seasonal increase. That said, the growth rate of inventory has really slowed from last year’s peak levels. However, we are 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 5.69% last week. In the past, inventory growth picked up amid higher rates, softening demand and rising year-over-year new listings.

• Weekly inventory change: (March 21-March 28): Inventory rose from 705,633 to 713,549
• Same week last year: (March 22 -March 39): Inventory rose from 668,185 to 675,557

New listings data

New listings data had a slow week, but was slightly positive year over year. We should get new listings above 80,000 per week during the seasonal peak months, which would be on the low end of the number we would see in a normal period.

I am 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 to 2019. However, it’s looking less and less likely for this to occur. 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: 67,934
• 2025: 67,855

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 home 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: 34.07%
• 2025: 35%

The week ahead: Iran, Iran, Iran and jobs week

I know it’s jobs week, and that does have some value even with the conflict still going; however, nothing will be normal until this war ends. Also, the markets aren’t taking the White House jawboning to bring oil prices down as seriously as they have before, so it will be interesting to see the bond market reaction to oil prices and the labor data this week.