Average 30-yr mortgage rates jumped last week, as reaccelerating inflation pushed global bond yields higher. Yet despite higher mortgage rates, April pending home sales still rose (for the 3rd-straight month).

Oh my! That April CPI! Inflation surged on higher energy prices, which affect a lot more than just gasoline and jet fuel prices (airline tickets, fertilizer, etc.) So far, the housing market is showing resilience, but there is little doubt that higher mortgage rates are keeping spring/summer transaction volumes more muted than they would be otherwise.

Oil prices, inflation fears, and mortgage rates are likely to remain elevated until the US/Iran conflict ends. But even today, mortgage rates are nearly a half a percentage point lower than they were at the same time last year, and many markets are significantly more buyer-friendly.

A day after the Fed voted to keep rates steady, the March PCE (inflation) figure jumped to +3.5% YoY, driven by higher oil prices. Mortgage rates moved up as well, but they’re still half a percent lower than they were a year ago, and flattish national home price growth is helping to improve affordability in many cities.

The US/Iran war continues, but the stock and bond markets are increasingly behaving as if it’s already over, with the S&P 500 stock market index now above its pre-war levels and average 30-yr mortgage rates slowly returning to the low 6% range.

Threats, rescue missions, an ultimatum, and a ceasefire. The situation in the Middle East remains fragile and unpredictable. But back home, we got another big beat from the BLS, and an encouragingly typical Spring rise in inventory.

Jobs growth remained weak, but the market is still focused on the potential inflationary impact of the US/Iran conflict. While mortgage rates have eased recently, they’re still nearly half a percentage point higher than they were pre-war.

It was a tough week for housing with oil prices rising further, wholesale inflation spiking, mortgage rates jumping, and the Fed more worried about inflation than the labor market. Let’s hope this war is over before the spring selling season really gets going.

The latest CPI (inflation) data was decent, and existing home sales are starting to pick up. But nobody cares, because everyone’s focused on the spike in oil prices in the wake of the US-Iran conflict. The last thing we need before the spring home-selling season is a sharp rise in inflation and mortgage rates. Thankfully, rates have so far stayed in the low sixes.

War is hell, and it’s also inflationary. That’s why the attack on Iran has led bond yields (and mortgage rates) to jump. The market is particularly worried about the impact of energy prices on US inflation. And the Fed will be less likely to cut rates if a prolonged war sends CPI higher. The good news is that mortgage rates are (so far) still in the low 6% range.

Last week, average 30-yr mortgage rates dropped to 5.99% — a near 4-year low. But transaction volumes haven’t significantly picked up yet. What’s the problem? Time. Refis can be done quickly, but buying a home takes months (from the initial decision to start looking.) Plus, it’s still the low season. If rates can stay this low into spring, buying will bloom.

Last week, the market decided it didn’t believe the strong January BLS jobs report — especially not in light of the huge revisions to the full-year 2025 numbers. Then on Friday we got a big drop in the January CPI (inflation). Net result: US treasury yields moved sharply lower and mortgage rates followed.