Elevated mortgage rates are taking their toll on the spring housing market, new numbers suggest, though at least one expert sees signs that some homebuyers have “shrugged off” economic uncertainty to get off the sidelines.
The numbers from the Mortgage Bankers Association show that applications for mortgages rose just 1.7 percent last week compared to the week prior. In a statement, Joel Kan — the MBA’s vice president and deputy chief economist — noted in a statement that “mortgage rates were generally higher last week, with the 30-year fixed rate at 6.46 percent, its highest level in five weeks.”
Joel Kan
Despite the small week-over-week improvement, loan applications did rise 7 percent last week compared to the same period one year ago. Kan said that the year-over-year uptick came “as potential homebuyers shrugged off the current economic and mortgage rate uncertainties and returned to the market.”
The MBA’s numbers also show that refinancing as a share of all mortgage activity fell to 40.8 percent last week, down from 42 percent one week earlier.
Though the MBA’s numbers include silver linings for real estate professionals, a world with rates in the mid-6 percent range is a far cry from what most observers were hoping for as the spring buying season began. Indeed, after years of elevated rates, many agents and brokers had specifically been looking at 2026 as the moment the market would finally thaw.
Instead, geopolitical conflicts such as the war in Iran have constrained global supply chains and pushed rates higher.
Against that backdrop, in late April the Fed once again held interest rates steady. And this week, the U.S. Bureau of Labor Statistics reported that the Consumer Price Index (CPI) — a measure of inflation — rose 3.8 percent in April. In a statement, Bright MLS Chief Economist Lisa Sturtevant noted that was “the highest rate of inflation in nearly three years.”
Lisa Sturtevant
Taken together, all of these factors — inflation, mortgage rates, loan applications and more — suggest the spring market may not pick up much steam any time soon.
“Higher inflation will have more consumers moving cautiously on big financial decisions,” Sturtevant said in the statement. “With prices rising again last month, and as the conflict in the Middle East shows no real signs of resolution, we’re likely to continue to see sluggish home sales for the rest of the spring and into the summer.”
