Mortgage rates decreased another seven basis points according to the Freddie Mac Primary Mortgage Market Survey released on April 16th. This brings mortgage rates to a four-week low. Compared to one year ago when rates were at 6.83%, this is a meaningful improvement for homebuyers during what is typically the busy spring homebuying season.
Mortgage applications increased 1.8 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending April 10th. “Given the evolving situation in the Middle East and its impact on energy and commodity prices, mortgage rates declined last week. The 30-year fixed rate decreased to its lowest level in a month,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “This dip in rates helped to support an increase in conventional refinance applications, which had declined for five consecutive weeks. Purchase activity remained subdued as potential homebuyers remained hesitant given the current economic uncertainty, which kept purchase applications below last year’s level for the second consecutive week. Conventional purchase applications were essentially unchanged over the week, while FHA and VA purchase applications declined.
The Bureau of Labor Statistics reported that the Consumer Price Index increased 3.3% in March from year-ago levels after rising 2.4% in February. Year-over-year core CPI (which excludes volatile food and energy costs) rose 2.6%, outpacing the February rate of 2.5%. Overall inflation rose 0.9% month-over-month after rising 0.3% in February. Core inflation rose 0.2%, matching the February increase. Economists had expected CPI to rise 0.9% month over month and 3.7% year over year in March, according to consensus estimates from FactSet. Core CPI was expected to be up 0.3% month over month and 2.7% year over year. Food prices remained steady in March after increasing 0.4% in February. Grocery prices fell 0.2%, while restaurant prices increased 0.2%. Overall energy prices increased 10.9% after rising 0.6% last month. While utility gas prices fell 0.9%, fuel oil prices increased 30.7%, gasoline prices rose 21.2%, and electricity prices increased 0.8%. Shelter prices rose 0.3% in March after rising 0.2% in February.
U.S. existing home sales fell to a nine-month low in March amid tight inventory and growing concerns over the labor market, and a recent increase in mortgage rates because of the war with Iran could limit activity this year. The larger-than-expected decline in sales reported by the National Association of Realtors on Monday was despite an improvement in housing affordability at the start of the year. The U.S.-Israeli conflict with Iran, which has boosted gasoline prices and caused a stock market selloff, is undercutting household purchasing power and wealth. “There is little in the near-term backdrop to suggest a quick rebound in sales,” said Daniel Vielhaber, an economist at Nationwide. “We continue to look for sluggish sales this year, particularly in the first half, before a gradual pickup as mortgage rates decline in the second half and into 2027.” Home sales dropped 3.6% last month to a seasonally adjusted annual rate of 3.980 million units, the lowest level since June 2025.
