Mortgage rates move higher, keeping the spring housing market in a holding pattern

Economic conditions continue to keep the costs of a home loan higher, with the war in Iran, inflationary concerns and a slow but stabilizing job market serving as the key headwinds to a potential spring housing market surge.

Mortgage rates moved higher for a second straight week, according to HousingWire’s Mortgage Rates Center. Rates for 30-year conforming loans stood at 6.49% on Tuesday, up 5 basis points from one week ago and 10 bps higher than two weeks ago.

Meanwhile, rates for 30-year loans through the Federal Housing Administration (FHA) increased 3 bps to 6.19% and rates for 30-year jumbo loans were unchanged at 6.29%. HousingWire’s data analyzed locked loan rates across all borrower credit profiles.

Mortgage News Daily, which relies on best-execution pricing from lender rate sheets, reported Monday that 30-year fixed rates were at 6.49%, up 7 bps since Friday. “This follows news over the weekend that Trump rejected Iran’s counterproposal to end the war,” MND explained. “In general, the longer the war continues, the higher oil prices will remain.”

Higher oil prices have factored into higher inflation, which will also have an impact on borrowing costs moving forward. Data released Tuesday by the U.S. Bureau of Labor Statistics showed that the all-items index for April was up 0.6% from March, which was slower than the 0.9% increase from February to March. On a yearly basis, however, inflation in April rose to 3.8%, compared to 3.3% in March.

Limited upside for homebuyers and sellers

“For housing, this report makes near-term rate relief harder to come by,” Sam Williamson, senior economist at First American, said in a statement. “The 10-year Treasury yield has risen sharply since early March and remains near its highest level since last summer, which is likely to keep a floor under mortgage rates.

“That does not erase the improvement in affordability over the past year, or the support from rising inventory and pent-up life-cycle demand, but it does limit the upside for housing activity until rates move lower and consumers feel more confident about the economic outlook.”

After rates rose last week, Kyle Bass, production business manager at Refi.com — an affiliate of Mortgage Research Center and Veterans United Home Loans — said that consumers remain in a better position today compared to this time last year.

“Around a year ago, average 30-year mortgage rates were sitting near 6.76% … and that difference can create real savings for borrowers carrying higher-rate mortgages,” Bass said.

“For example, a homeowner with a $350,000 mortgage at a 7.50% interest rate would have a principal and interest payment of roughly $2,450 per month. Refinancing that same loan closer to today’s rate environment at 6.37% could reduce the payment to approximately $2,180 per month, creating savings of roughly $270 per month, or more than $3,200 annually.”

In this week’s Housing Market Tracker, HousingWire Lead Analyst Logan Mohtashami pointed to mortgage spreads as the key for lower rates in 2026. Based on the worst spreads from the past three years, rates could range anywhere from 7% to 7.57%.

Potential policy shift?

Kevin Warsh, who was nominated by President Donald Trump in January as the next Federal Reserve chair, is in position to be confirmed this week. Warsh already cleared a key vote in the Senate banking committee, and on Monday, he advanced in a procedural vote.

A final vote to confirm him as Fed chair is expected Wednesday, according to reporting from Politico. That would allow Warsh to take the reins before Jerome Powell’s tenure officially ends Friday. Powell has already said that he will serve the remaining two years of his term as a Fed governor.

While Warsh was handpicked by Trump, who has repeatedly campaigned for lower interest rates, a new Fed chief is unlikely to sway monetary policy in the short term. Late last month, the central bank held the federal funds rate at a range of 3.5% to 3.75% for a third straight meeting, with Stephen Miran casting the only vote in favor of a cut.

With inflation running higher and employment showing tepid growth in early 2026, interest rate traders see little hope on the horizon for lower rates. The odds of a rate cut at the next Fed meeting in June currently stand at 2.4%, rising only slightly in July and September, according to the CME Group’s FedWatch tool.

“Time will tell if and when these circumstances change, but there is a high likelihood we won’t see any rate reduction until December at the earliest,” said Selma Hepp, chief economist at Cotality.