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%
Well, we had a good thing going on; even at the start of the Iran conflict, 10-year yields and mortgage rates were relatively calm, with good credit spreads. That is gone; Rates not only broke 6.25% but ended the week at 6.41% on Friday as mortgage spreads worsened. Taken together, these factors changed the story of a low, low volatility for 2026. The speed of travel now begs the question of what will happen next in terms of prices.
The 10-year yield is very close to its annual high, but because mortgages are widely spread on Friday, mortgage rates are also at an annual high. As of September 2025, the 10-year yield remains below 4.30% and, as you can see in the chart below, is testing the upper end range, but for now, it hasn’t gone up.
I talked about 10-year yields and mortgage rates on Friday’s episode of the HousingWire Daily podcast and also appeared on CNBCFast Money to provide real estate updates on the Iran conflict.
Now, the PCE inflation report on Friday was still 1% above the Fed’s target and as the war continues to grow, the 10-year yield has not broken above this bowl pattern that I have discussed for many months. However, if the war escalates, inflationary pressures persist and the economy continues to grow, yields and rates may rise.
If the economy is adversely affected by this inflationary pressure, that would be a different story; however, it may take weeks or months for that to show up in the data. We’ve gone from a calm bond and mortgage market to the current, uncertain chaos, so the key will be to follow the daily volatility updates until we get some closure.
Rates ended the week at 6.41%, according to Mortgage News Daily, and Polly’s mortgage rate lock data shows a weekend rate of 6.14%. As you can see, the volatility of the market rate is trending in the wrong direction. Housing prices, when calm and below 6.25%, can work in the housing market. Until then, we will see how these higher values affect the output data. In the past, after we had favorable data fluctuations, values of up to 7% and more affected the data.
Mortgage spreads
Mortgage spreads remain positive for housing in 2026, reducing mortgage rate volatility, and are close to normal levels. However, last week we had a bad spread day on Friday, which is not visible on this weekly chart. If the spread worsens on the basis that this inflation may trigger a recession, which may increase the risk of defaults on the market, we will lose another positive exception for 2026. Meanwhile, progress in the spread of mortgages has changed.
Historically, mortgage spreads have varied from 1.60% to 1.80%. Last week’s spread closed at 1.93%. Also, the one-day Friday distribution was not included in this weekly data.
However, I wanted to show what prices will be this week compared to the worst levels of the spread in the last three years and the 10-year yield where it is today.
- If we had very bad loan spreads in 2023, loan rates would be 7.59% today, not 6.41%
- If we had the worst rates for 2024, loan rates would be the same 7.21% today.
- If we had the worst rates for 2025, mortgage rates would be the same 7.02% today.
Weekly pending sales
Pending home sales data provides a week-to-week perspective, although results may be affected by holidays and seasonal fluctuations. The last four weeks have been good for our weekly pending sales data. We’ll see if that goes forward, especially if prices go up. Weekly pending sales typically take 30-60 days to receive sales data. Year-over-year sales growth slowed slightly this past week.
Weekly pending sales for the past week for the past two years:
- 2026: 67,915
- 2025: 66,184
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 11% year-on-year growth with 7.8% week-on-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 and the year-on-year growth, we have something legit, that's for sure. In 2026, each week showed positive year-over-year growth.
As you can see in the chart below, we have some seasonality in the weekly data.
Here's 2026 so far:
- 4 weekly fine prints
- 4 weekly negative prints
- 1 weekly flat print
- 6 weeks of double digit growth year over year
- 9 weeks of great annual growth
Weekly housing inventory data
The housing inventory should be starting its annual increase. That said, the inventory growth rate has actually slowed from last year's highs, to the point where we may see a negative year-over-year print in our weekly inventory. However, we are far from the unhealthy levels of 2021, 2022 and 2023.
We went from 33% year-on-year growth in inventory to the highest point in 2025, to 6.35% last week. In the past, inventory growth rose amid high levels, softening demand and year-over-year inventory increases. New listing data is still negative year-over-year, but this week, it's a good start to the spring season expansion.
- Weekly inventory changes: (March 6-March 13): Inventory increased from 686,879 to 697,251
- The same week last year: (March 7-March 14): Inventory increased from 642,479 to 655,625
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 is about the end of the range 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: 67,041
- 2025: 68,192
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, and the Fed meeting
On Monday's podcast, Editor-in-Chief Sarah Wheeler and I will preview the Fed meetings, but like last week's theme, as long as this Iran conflict continues, that's going to be more important than any economic data we get, because the data is still looking back compared to the current reality.
The main surprise we can have from the Fed meeting on Wednesday is that some doves may sound hawkish, as the battle continues. Buckle up, folks, next week might be the craziest one yet.
