Mortgage Interest Rates

According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.18% in March, 13 points (bps) higher than in February. The average 15-year rate also increased by the same amount to 5.56%. Despite the recent increase, both rates remain lower than a year ago by 47 bps and 27 bps, respectively.

The rebound in mortgage rates was driven primarily by movements in the 10-year Treasury yield, which jumped 11 bps to 4.24% as tensions in the Middle East escalated.

Mortgage Rate Forecast

Amid market disruptions and inflation uncertainty resulting from the war in Iran, the Federal Reserve in March held the federal funds rates at 3.5% to 3.75%. They revised their inflation expectations higher from 2.4% last December to 2.7%, but maintained that one rate cut is still possible in 2026.

Impact of Rate Declines on Housing

The increase in mortgage rates diminished refinance activity, which fell 11.4% in March. Purchase applications, on the other hand, increased 6.4%, driven by growth in both FHA and VA segments. Relative to March 2025, refinance and purchase activities were up 60.4% and 6.4%, respectively.

However, faced with stubbornly high home prices and elevated interest rates, many would-be buyers continue to stay on the sidelines until housing affordability conditions improve.