Purchase applications for U.S. homes jumped 12% year-over-year last week, even as the war with Iran continues and mortgage rates remain above pre-conflict levels. New listings hit 83,395, a multiyear high. Is the housing market showing unexpected resilience?
The Big Picture
Last week was one of the most positive reports since I started writing the Housing Market Tracker in late 2022. Everything I want to see in a healthy market happened: weekly pending sales hit a multiyear high, purchase applications rose 10% week-over-week and 12% year-over-year, and new listings finally broke above 80,000 for the first time in years. All of this is happening while the economy faces an epic snowstorm, headlines about AI-driven layoffs, and most notably, an active war with Iran.
Mortgage rates have fallen from a high of 6.64% to a recent low of 6.29%, which certainly helped. But the key data point is that weekly pending sales hit 80,258, versus 67,892 a year ago. That's an 18% year-over-year jump. This is not just an Easter rebound: demand is showing a strength few expected.
“The U.S. housing market is demonstrating unexpected resilience in the face of war, inflation, and recession fears.”
By the Numbers
- Weekly pending sales: 80,258 in 2026 vs. 67,892 in 2025. A multiyear high for the calendar week.
- Purchase applications: +10% week-over-week and +12% year-over-year. The strongest weekly print in months.
- New listings: 83,395 in 2026 vs. 69,891 in 2025. First time above 80,000 since 2023.
- Mortgage rates: Fell from 6.64% to 6.29%, still above pre-war levels.
- 2026 purchase app weekly performance: 7 positive weeks, 7 negative, 1 flat. 13 weeks of positive year-over-year growth.
Why It Matters
Historically, rates above 6.64% have been a drag on demand. The fact that the market is reacting positively even with rates around 6.29% suggests significant pent-up demand. Buyers who waited through 2024-2025 are finally entering the market, perhaps resigned to the fact that rates won't drop dramatically.
New listings are the most encouraging signal. During the 2006-2008 housing bubble crash, weekly listings ranged from 250,000 to 400,000. The current 83,395 is nowhere near oversupply territory. In fact, it's a normal level for a healthy market, similar to the 2013-2019 period. If this trend continues, we could see relief from the inventory shortage that has plagued the market since 2020.
The clear winners are sidelined buyers: they finally have more options. The losers are sellers who expected peak prices, as more supply could moderate price growth.
What This Means For You
- 1Buyers: Take advantage of the relatively lower rates (6.29%) and rising inventory. But act quickly: if demand stays strong, prices may not budge.
- 2Sellers: Don't get complacent. Rising listings mean more competition. Pricing realistically from the start will be key.
- 3Investors: Watch rates closely. If they fall below 6.25%, we could see a significant acceleration. Rental markets could benefit if buying remains expensive.
What To Watch Next
The key data point this week will be whether pending sales can hold above 80,000 or if it was a one-off bounce. Also watch purchase applications: we need at least 12-14 consecutive weeks of weekly growth to confirm a sustainable trend.
The Federal Reserve and inflation data remain the wild card for rates. Any signal that the Iran war escalates could send rates higher again. But for now, the housing market is showing surprising resilience.
The Bottom Line
We are seeing what could be the start of a housing market normalization: more inventory, solid demand, and rates that, while elevated, are not paralyzing activity. If this trend holds, 2026 could be the year the market finally finds a balance. But geopolitics and inflation remain clouds on the horizon.
For now, the housing market is winning the battle.
Deep Dive: Why Now?
To understand the magnitude of this rebound, we need to consider the macro context. The war with Iran began in January 2026, and mortgage rates initially spiked from 5.99% to 6.64% within weeks. Fear of an oil price surge and a global recession led many analysts to forecast a housing market collapse. Yet the data over the past few weeks paints a very different picture.
One possible explanation is that pent-up demand from 2024-2025, when rates hovered between 6.5% and 7.5%, is finally finding an outlet. Millennial buyers, the largest demographic cohort, have been postponing home purchases for years. Now, with slightly lower rates and more inventory, many are deciding it's time to act.
Moreover, the labor market has remained surprisingly robust despite tech layoffs. The unemployment rate stands at 4.1%, and wages continue to grow at a 4.5% year-over-year pace. This provides the confidence needed to take on a mortgage, even with elevated rates.
Implications for Monetary Policy
The housing market's resilience could complicate the Federal Reserve's plans. If housing demand stays strong, it could put upward pressure on prices and, by extension, inflation. This would reduce the likelihood of rate cuts in the near term. In fact, fed funds futures now price in only one 25-basis-point cut by end-2026, down from three cuts expected earlier this year.
For bond investors, this means the yield curve could stay inverted longer. The 10-year Treasury yield, currently at 4.45%, could rise if housing data continues to surprise to the upside.
Near-Term Catalysts
In the coming weeks, the following events could define the market's direction:
- April inflation data: If core CPI exceeds 3.2%, rates could rise again.
- Fed speeches: Any hawkish commentary could dampen enthusiasm.
- Iran conflict escalation: A significant escalation, such as the closure of the Strait of Hormuz, would spike oil prices and rates.
For now, however, the housing market is showing a strength that deserves attention. Investors betting on a slowdown may be caught off guard.
