Mortgage rates continued to move higher in the past week as geopolitical turmoil caused the 10-year Treasury yield to soar, although mortgage spreads remain well below their levels of 2024 and 2025.
At HousingWire‘s Mortgage Rates Center, rates for 30-year conforming loans were at 6.77%, their highest point of the year. Rates for 30-year loans through the Federal Housing Administration (FHA) averaged 6.33% and rates for 30-year jumbo loans averaged 6.89%. HousingWire Data is benchmarked across a base of retail lenders using a standardized borrower scenario with a 75% loan-to-value ratio and a 780 FICO score.
Last week, loan officers told HousingWire that they’re turning to seller credits, recalibrated home search criteria and faster closings as solutions to keep deals afloat.
“The quicker the closing, the better, because I don’t think the market is going to get better,” said Adam Neft, an Ohio-based LO at Ultimate Mortgage Brokers. “The conflict in Iran, from what little I know, doesn’t look like there’s an easy resolution. The longer it takes, the longer the chance of interest rates going up is. Hopefully, it’s a short-term thing.”
Higher rates are ‘here to stay’
Melissa Cohn, regional vice president at William Raveis Mortgage, pointed to rising inflation data tied to the ongoing war in Iran as the key culprit for higher rates.
“Higher prices are inflationary. Rising inflation causes the 10-year bond yield to rise and mortgage rates along with it,” Cohn said in a statement. “As long as oil prices remain elevated, mortgage rates will be as well. With no end in sight to the war, higher rates are here to stay for the foreseeable future.”
Kyle Bass, production business manager at Refi.com (an affiliate of Mortgage Resource Center and Veterans United Home Loans), said last week that “refinance activity is softening as borrowers continue to adjust to a higher-rate environment.” But this is simultaneously boosting demand for home equity lines of credit (HELOCs) and similar solutions that keep homeowners in their current low-rate, first-lien mortgages.
“That trend is showing up nationally. Refi.com’s recent home equity analysis found that HELOC originations increased to more than 504,000 in 2025 from roughly 456,000 in 2024, while the average approved HELOC credit limit climbed to approximately $135,000 as homeowners become increasingly strategic about using their equity while preserving favorable first-mortgage financing,” Bass said in a statement.
Last week, the Senate confirmed Kevin Warsh as the new chair of the Federal Reserve. Warsh could potentially seek looser monetary policy down the road, but market observers say that won’t happen anytime soon. In fact, a rate hike could be in the cards for late 2026 or early 2027.
“Generally, a Warsh-led Fed could be modestly more dovish on rates, anchored by productivity optimism, while still carrying a hawk’s credibility,” said Selma Hepp, chief economist at Cotality. “For housing, the key is whether he builds consensus across the Fed that reduces policy and mortgage-rate volatility, and keeps affordability from slipping further for households.”
“The Fed will not be in a position to cut rates, and it is becoming increasingly likely that the next Fed move could be a rate hike,” Cohn added. “The new Fed chair, no matter how dovish he may be, has no capacity to compel the other Fed members to think that a rate cut is the right thing to do right now.”
Housing market response
On Tuesday, the National Association of Realtors (NAR) reported that pending home sales were up 1.4% in April on a monthly basis and 3.2% higher year over year. But Sam Williamson, senior economist at First American, said that pending sales are only 1.6% ahead of their 2025 average, which suggests nothing more than slight improvements for this year’s spring housing market.
“The latest data suggest the early spring market is shaping up to be another year of modest improvement, rather than the stronger breakout many had hoped for entering the year, when lower mortgage rates and rising household incomes were boosting consumer house-buying power,” Williamson said.
“Still, underlying buyer conditions remain better than a year ago: inventory has improved, home-price growth has cooled and rising incomes have helped put buyers in a somewhat stronger purchasing position relative to last year. Those conditions could support firmer sales activity in the second half of 2026 if mortgage rates stabilize and broader economic uncertainty eases.”
This week’s HousingWire Housing Market Tracker shows that consumer demand remains positive. The 78,000 weekly pending sales represents a 6.1% increase from this time last year, while purchase mortgage application demand has been running hotter for most of 2026.
HousingWire Lead Analyst Logan Mohtashami also said that while fewer people are listing their homes, inventory growth is slightly higher on a year-over-year basis. This has put the market “in a much better spot with with inventory levels, which are at a multiyear high and far from the savagely unhealthy levels of 2020-2023.”
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