Posted on 05/19/2026 10:17:18 AM PDT by Miami Rebel
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.”
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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It was 8.5% when I bought a house in 1992. We will survive.
8.5% on what?
8.5% on 80k is a lot cheaper then 6.7 on 500k.
$140K. But it doesn’t matter. Salaries are a little higher now then they were in 1992. I was only making $40K
US pending home sales increased 1.4% month-over-month in April 2026, following an upwardly revised 1.7% gain in March and surpassing market expectations of 1%. This marks the third consecutive month of growth, with rises in the Northeast (6.6%), Midwest (3.0%), and West (0.4%).
Year-over-year, pending sales climbed 3.2%. NAR Chief Economist Dr. Lawrence Yun noted, “Buyers are returning with cautious optimism despite economic uncertainty and a slight rise in mortgage rates. Demand would be even stronger if mortgage rates returned to earlier 2026 levels.”
He added that historically low foreclosure sales mean minimal price discounts, with most markets seeing higher prices than a year ago. Yun warned, “Unless supply increases significantly, home price growth could outpace wage growth, further reducing homeownership rates. All efforts must focus on boosting housing supply.”
(source: National Association of Realtors 5/19/26)
11.5%.
Everything in the market is directional:
10% to 8.5% is good.
4% to 5% is bad.
This bump in rates exacerbates what was already an affordable housing crisis.
[My rate in 1987 on a 30-year mortgage was 10.25%. On our second home purchase in 1999 it was 7.5%.]
it always cracks me up when boomers chest thump and proudly gloat about how they bought houses with high interest rates. Not hard when houses cost $14. It doesn’t matter what the rates were then when they cost 3X the average incomes. Houses are 6-7 the nationwide income now with higher taxes in every other area too. And they’re 10X incomes in some markets. in 1971 the average income was $10K and houses cost $25K. in 2021 it was 6 times income instead of 2.5x.
We paid off our 6.7% 30 year mortgage years ago at 16 years. It’s not that difficult!..................
The rate on my first mortgage was 9.25% FHA. The rate on my second mortgage was 8.25% FHA. The rate on my third mortgage was 8.5%. The rate on my fourth mortgage was 9.75% for one year and then I refinanced to 5.375% on an adjustable which went down to 3.0% and stayed low for years. Its only 6% now. The super low rates are a recent phenomenon.
Traditionally up until post WWII and the VA loan program most people rented and did not own their home.
When the mass deportations pick up after the midterms I expect to see the housing inventory increase significantly and sales prices should come down. Then people will be able to purchase at 6%.
““The quicker the closing, the better, because I don’t think the market is going to get better,”
Understatement of the year, so far.
“it always cracks me up when boomers chest thump and proudly gloat about how they bought houses with high interest rates. “
I guess you never get cracked up.
“in 1971”
That was not a period of high interest rates.
“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. “
That’s like 5% of prospective retail buyers.
Then there’s FHA and VA. Combined they are about 1/3 of the mortgages issued.
Without these loans the housing market would be in free fall. It may be anyway.
When it hits double digits... Then things will start correcting themselves. Prices will start dropping and the market will stabilize.
There is a not of hurt coming our way and repeating the mid to late 1970s will not be much fun.
People want bigger and fancier houses.
In 1971 it was 1400 soft.
Because you simply cannot get a small house in a non-crime ridden area.
This is actually a good thing for the housing market. The sale prices of homes are out of control everywhere. Prices are nearly double what they were before COVID, at least here in NJ. Not uncommon to see basic starter homes here going for upwards of $600K or more, usually more.
On what planet do you imagine that deportable aliens represent more than a rounding error in home ownership?
It’s not the rate.
It’s the price.
$75K Income can’t buy a $450K house, with commensurate Taxes, Insurance, Maintenance, heaven forbid HOA fees etc.
Interest rates? Housing market? People need to get their priorities right, Israel comes first.
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