Demand for housing is high and inventory is low, even with the Iran conflict

Weekly pending sales

Pending home sales data provides a week-to-week perspective, although results may be affected by holidays and temporary fluctuations, such as a major winter storm in January. We were showing year-over-year growth at the beginning of the year, and then the snow storm slowed things down.

Now that all the snowball data is gone, we have three straight weeks of year-over-year growth, which should be the case given that mortgage rates have been below 6.25% all year.

Weekly pending sales for the past week for the past two years:

• 2026: 66,127
• 2025: 63,508

Mortgage application data

The shopping app data is a forward-looking line of data: growth here leads to approximately 30-90 day sales, and last week we saw 10% year-over-year growth with 6.1% week-over-week growth.

In this data line, what I really value is at least 12-14 weeks of positive weekly growth. If you can find this in addition to year-over-year growth, we have something legit for sure. In 2026, each week showed positive year-over-year growth. The last three weeks, combined, have grown by 10% year over year, which if this continues, will give us a few hundred thousand home sales this year compared to last year.

As you can see in the chart below, we have some seasonality in the weekly data.

Here’s 2026 so far:

• 3 weekly fine prints
• 4 weekly negative prints
• 1 weekly flat print
• 5 weeks of double digit growth year over year
• 8 weeks of good annual growth

10-year yield and housing rates

In HousingWire’s forecast for 2026, I expect the following range:

• Loan rates are between 5.75% and 6.75%
• The 10-year yield fluctuates between 3.80% and 4.60%

So what just happened last week? Oil prices moved in the same direction, and mortgage rates were calm amid the Iran game and a weak jobs report on Friday. Last week, my 10-year yield markers were that bond traders would take the Iran conflict seriously if the 10-year yield closed above 4.15% and we saw a sell-off in bonds. That didn’t happen because Friday’s jobs report was flat, and bond traders reacted to it.

But in relation to oil prices, my mark was that if the prices are above $82, all hell can break loose because if it goes higher than that, there is no market sense of the closure of the situation in Iran, and things can be very bad. Oil rose to $92 last week and could go higher this week.

Last week saw a 41.6-cent-per-gallon increase in gas prices, according to GasBuddy data, which is among the top 10 weekly increases in history. I’m putting this crisis over 11-14 days from now, because if things get worse with oil prices, Republicans are at risk of losing a lot of seats in the midterms.

Remember, jet fuel and diesel, which transport food, can increase the cost of living in the short term. I will be surprised if this takes more than 14 days if oil prices go up and up. For now, the 10-year yield has behaved more only because the job data has not been good.

Rates ended the week at 6.14%, according to Mortgage News Daily, and Polly’s mortgage rate lock data shows a weekend rate of 6.14%.

Mortgage spreads

Mortgage spreads remain positive for housing in 2026, reducing mortgage rate volatility, and are close to normal levels.

Historically, mortgage spreads have varied from 1.60% to 1.80%. Last week’s spread closed at 1.94%.

If spreads match 2023 highs, mortgage rates would be 1.17 percentage points higher, at 7.31%. As spreads return to normal, mortgage rates may remain lower for longer than in previous years.

In fact, we only have 20-34 upgrade points left in circulation. If volatility is suppressed for a long time, better spreads could come later in the year, but the big improvement here has already started.

Weekly housing inventory data

Housing inventory data dropped last week, which was a bit of a shock. Hopefully, we’ll see the traditional seasonal increase in inventory soon. Inventory is at much healthier levels now than it was a few years ago. However, if inventory does not start growing soon, we may have negative year-over-year inventory data in late March or early April.

We went from 33% year-on-year growth at the peak in 2025, to 6.91% last week.

• Weekly inventory changes: (Feb. 27-March 6): Inventory has fallen 690,357 to 686,879
• Same week last year: (Feb. 28-March 7): Inventory increased from 639,357 t0 642,479

New listing data

New listings data also showed strong week-on-week growth last week, while still down year-on-year. We should get more than 80,000 new listings per week during the peak months of the season, which would be on the low end of the number of new listings we would get in a normal period.

I hope that the new listing data ranges between 80,000 and 100,000 per week during peak seasons, as was the case from 2013-2019. For context, during the housing bubble crash, new listings ranged from 250,000 to 400,000 per week for several years.

Here is the last week’s listing data for the past two years:

• 2026: 61,710
• 2025: 63,870

Discount percentages

In general, about one-third of homes are discounted before they sell, reflecting the volatile nature of the housing market. As the loan and property values ​​rise together, the percentage of the amortization increases.

However, prices are near multi-year lows, so we’re now seeing year-over-year price reduction percentage data. This makes sense given that demand has slowed and inventory growth has slowed. We’re starting to see a high seasonal shift in price reduction data, so year-over-year data will be key.

The percentage price reduction last week is now 1.25% lower than this time last year.

Last week’s price reduction percentage:

Next week: Iran, inflation, existing housing sales and housing starts

To make myself clearer than ever: none of the current economic data is important as long as this Iranian conflict is not resolved. Oil prices could rise significantly. which means higher electricity, jet fuel, and diesel prices, which may increase food prices. So, while we have a lot of economic data to be released this week, the Iran conflict is of particular importance.

Note that this week’s current home sales report is the last report that will include the impact of the snow. You can be sure that, like clockwork, every fake US real estate expert who didn’t know why existing home sales were down last month still won’t understand why they’re down this month. But you know better because you read this Housing Market Tracker and listen to the HousingWire Daily podcast! So, get your popcorn and watch this week’s worst in data they don’t understand, while you’re ready to explain what’s really going on.