This Week's Data Confirmed My Theory

Rates Are Up 75 Basis Points Since The War Started. And Buyers Are Still Showing Up.

I want to start with a number this week.  

75. 
    

That is how many basis points mortgage rates have climbed since the day before the United States went to war with Iran on February 28th.  That equates to three quarters of a percentage increase on mortgage rates which hit 6.75% Tuesday - the highest since July 2025 - representing the fastest rate spike since late 2024. For a buyer putting 20% down on a $420,000 home that is $167 more per month on their payment. 

That is the war tax. 

And YET something happened this week that should make every person sitting on the sidelines stop and think. 

Pending home sales increased. 

The Rate Story First 

Rates are up. The median existing home price hit $417,700 in April - the 34th straight month of year-over-year price increases. High rates and high prices in the same week. On paper that is as unfriendly a market as we have seen in this cycle. 

Then on Wednesday the bond market caught a break. Newswires suggested the U.S. and Iran are nearing a final draft of a peace agreement and rates recovered on the news. By Thursday rates had pulled back from their highs. Today they are sitting around 6.55% depending on the lender and loan type. 

One analyst put it plainly this week: until there is a verified peace treaty and oil prices respond in a sustained way, any dip in rates is a pause, not a trend. The bond market is whipsawing on every headline. 

That is the most honest sentence that should be translated directly into every buyer’s rate strategy.  This is coming from a gambler – I typically like to float my borrowers typically to edge out any monthly savings I possibly can.  Not in this market, no siree. Any dip is a pause, not a trend.  I reserve the right to change my stance on this as information changes but right now the only thing that would make a rate dip a lasting trend downward would be a verified peace deal with sustained oil price movement. I’m losing hope on that as a human but as a mortgage lender, I’ll keep praying. 

Here’s what Mortgage News Daily's chief operating officer Matthew Graham wrote this week: bonds are telling politicians to get serious about ending the war or face increasingly dire consequences. 

It’s interesting no one is leading this news though. 

Pending home sales rose in April both month over month and year over year. And mortgage purchase applications rose 4% last week - 7% higher than the same week one year ago. 

What in the actual F is that? 

Rates hit 6.75%. The highest in nine months. And more buyers applied for purchase mortgages?!  What is this data trying to tell us? 

The NAR's chief economist Lawrence Yun reported that agents on the ground are seeing a surge in buyer demand in just the last few weeks. 

NAR said there are two barriers to homeownership right now.  Rates and uncertainty.  The buyers who have been frozen since February 28th are starting to thaw. I think it’s because they are more confident that certainty isn’t coming.  Weird sentence I know, but people are starting to accept that this war isn’t going to be quick.  And they’ve already waited years to buy.  So maybe they are accepting 6.75% as the reality. They have stopped waiting for a rate that feels good and started looking for a home that makes sense. 

That is the Confidence Tax beginning to lift even though the uncertainty is still very present.   

This week's pending sales number is the first real data point confirming my hypothesis that 2026 would be your last best chance to break into the housing market. 

The Housing Bill Nobody Is Talking About 

In the middle of rate chaos and war headlines, Congress did something genuinely significant this week that almost nobody in the real estate conversation is covering.  Back in March I told you to start following the 21st Century ROAD to Housing Act.  Both chambers have now passed a version of this bill twice because on Wednesday in a 396-13 bipartisan vote - one of the most lopsided votes in recent memory, the House passed the latest version. The bill now goes back to the Senate. 

Here is what is still in it and why it matters. 

The bill aims to boost housing supply and lower costs. The Senate's version included a ban on large investment firms - defined as those owning 350 or more units - from buying single-family homes. The House amended that, allowing some investor purchases while providing regulatory relief for community banks. 

The legislation won support from the rental, construction and housing industries by removing a requirement in the Senate-passed bill that would have forced major investors to sell any units they built beyond the cap within a seven-year window. 

That last part is the controversial one. The Senate wanted to force institutional investors - the Wall Street landlords that first-time buyers have been competing against - to divest. The House softened that. Whether the Senate accepts the House's version is the open question. It is not clear whether the revamped House bill will gain the needed 60 votes to pass the Senate. 

Here is my personal take: a 396-13 vote on anything in Congress right now is remarkable. The political will to address housing supply is real and bipartisan. Whether this specific bill becomes law in this specific form is a separate question. But Washington finally accepts that the housing shortage is a crisis worth legislating around. 

For first-time buyers specifically: if the institutional investor restrictions survive in any meaningful form, it removes a perceived barrier.  The barrier is frustrating structural disadvantages you have been told you’re competing against. Cash buyers with algorithmic bidding strategies who don't need to qualify for a mortgage.  I said perceived for a reason.  Institutional investors currently own only 3-5% of the single family housing stock in America.  The thing is that they had dedicated significant portions of their funds to rapidly increase that in recent and future years. 

So it could very well be a win in terms of competition….again, if it passes the Senate. 

What This All Means Right Now 

Three things happened this week that matter. 

Rates hit their highest level since July and then pulled back on peace deal hopes. We have a new strategy, we lock your rate as soon as you find a home because the bond market doesn’t like the headlines right now. 

Pending sales rose and purchase applications jumped 7% year over year. This influences our strategy when it comes to getting very serious about finding a home you can make the numbers work on. 

Congress passed a landmark housing bill 396-13. The honest read: not law yet. Senate still has to reconcile. It’s a nice vibe check but doesn’t influence our strategy yet.