The 30-year fixed-rate mortgage (FRM) was 6.48% on March 25, a significant one-day drop of 0.07% from March 24 when it was 6.55%, according to Mortgage News Daily (MND).
Still, that was significantly up from March 19, when it was calculated as 6.22% by government-sponsored enterprise Freddie Mac.
Matthew Graham, chief operating officer for MND, considers bond yields and geopolitics when discussing recent mortgage rate activity.
“The past 24 hours have seen multiple news stories with seemingly contradictory updates regarding the state of the Iran war,” Graham wrote. “There’s a ceasefire. There’s no ceasefire. There’s negotiation. There’s no negotiation, etc.”
Related: Redfin, Zillow reveal major mortgage rate, housing market change
From the market’s perspective, the key shift has been an apparent move toward diplomacy and de‑escalation, Graham observed. That signal alone has helped crude hold onto most of the early‑week pullback.
“Bond yields (which correlate with mortgage rates) have been doing even better than oil prices today,” Graham wrote. “The net effect is the lowest average mortgage rates since last Thursday.”
“Notably, these rates are still sharply higher than February’s and, apart from the past few days, the highest since early September, 2025.”
Zillow predicts mortgage rate impact on housing market
Against this backdrop, real estate technology company Zillow noted that affordability is still improved over March 2025 — and said the recent uptick in rates has chipped away at those improvements and rattled some buyers’ nerves, prompting many to pause or wait for more stability before moving ahead.
“Mortgage rates have risen back to the mid-6% range, after briefly falling below the important psychological threshold of 6%,” Zillow wrote. “Here lies the conundrum for what it means for home buying and selling — affordability is still improved from a year ago, but about a third of the gains have reversed in recent weeks.”
“Home shoppers can still afford more than they could last year, but because of the hit to sentiment — both with anchoring on the buying power from a few weeks ago, and uncertainty about their financial prospects — some may choose to wait to transact.”
Looking ahead, Zillow forecasted that the impact of mortgage rates hikes on the housing market will depend on how long the high rates last.
“The bulk of home activity typically happens between March and October,” Zillow wrote. “Though the scenario modeling is linear for simplicity, if the situation resolves quickly, it’ll be early enough in the home shopping season for catch-up activity, and transactions might be higher than our modeled scenarios.”
“The longer it takes for the rate shock to resolve, the more likely transactions would be delayed to next season, offering a repeat of 2025.”
Zillow examines housing market uncertainty
Mischa Fisher, chief economist for Zillow Group, reported that Zillow entered 2026 expecting only slight growth in the housing market — projecting a 4.3% rise in existing‑home sales.
That wouldn’t signal a boom, but it would mark a market beginning to stabilize, with 2026 functioning as a reset year, Fisher had concluded.
More recently, though, volatility in energy prices and renewed inflation worries have introduced fresh uncertainty into that outlook.
“The housing market has been bouncing along the bottom for three years, and we entered 2026 with data-driven optimism that the market would start to improve, with a modest increase in existing home sales and the year ending with a typical home affordable to the median household in 20 of the 50 major metro areas,” Fisher wrote for Zillow on March 24.
“More uncertainty has entered that outlook, with elevated mortgage rates likely to act as a slight drag on the spring season, already removing about a third of the year-over-year affordability gains we’ve seen,” he added.
Market conditions can shift quickly, meaning the outlook could brighten or deteriorate just as fast, Zillow explained.
Given the latest uncertainties, Zillow says it’s more useful to think about 2026 not as a single forecast but as a range of possible scenarios, each shaped by how key economic factors evolve over time.
TheStreet
Zillow models real estate scenarios
To explore a range of possible outcomes, Zillow analyzed two main channels: the impact of higher inflation on mortgage rates, and the risk that elevated prices could weaken consumer spending enough to nudge the unemployment rate slightly higher.
“One must be careful at over interpreting the full-year effect of something that does not persist for a full year,” Zillow wrote. “The challenge here, of course, remains that no one knows precisely when elevated energy prices will subside; the futures market for oil can offer some clues about investor expectations, but nothing is certain.”
“We have modeled the outcome if the current 50 basis-point (bps) increase in mortgage rates persists for the full year alongside a slight 20 bps increase in the unemployment rate.”
Zillow forecasts 2026 existing home sales
- If the combined shock of higher mortgage rates and a modest rise in unemployment lasted through April, Zillow estimates 2026 existing‑home sales would still post a 3.48% annual increase.
- If those pressures extended through June and eased on July 1, Zillow projects sales would end the year up 2.33%.
- If the disruption carried through the heart of the buying season and didn’t lift until Sept. 1, Zillow expects sales would rise only 1.21%.
- And if mortgage rates stayed 50 basis points above their counterfactual path and unemployment remained 20 basis points higher for the rest of 2026, Zillow says existing‑home sales would slip slightly, declining 0.73%.
(Source:Zillow)
Related: Zillow predicts mortgage rate, housing market change
#Zillow #predicts #mortgage #rate #housing #market #change