Homes in Pacifica, California, US, on Monday, March 23, 2026.
David Paul Morris | Bloomberg | Getty Images
Mortgage rates moved even higher again last week, as the war with Iran continues to stoke fears of inflation. As a result, total mortgage application volume fell again, down 10.4% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, increased to 6.57% from 6.43%, with points remaining unchanged at 0.65, including the origination fee, for loans with a 20% down payment.
Applications to refinance a home loan, which are most sensitive to weekly interest rate moves, dropped 17% for the week and were 33% higher than the same week one year ago. Earlier this year, when rates were lower, refinance demand was more than twice what it was the year before.
“The 30-year mortgage rate, now at 6.57%, reached its highest level since last August and is up half a percentage point from just one month ago,” said Mike Fratantoni, MBA’s chief economist, in a release. “Refinance application volumes declined sharply again last week, and are down more than 40% compared to last month.”
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Applications for a mortgage to purchase a home dropped 3% for the week and were just 1% higher than the same week one year ago. The spring housing market, traditionally the busiest of the year, is well underway. While it was forecast to be stronger than last year’s, the war is weighing on affordability and stoking fears over the direction of the overall economy.
“Purchase applications for FHA and VA loans continue to hold up better than those for conventional buyers. However, the shocks of the jump in rates and the increase in overall economic uncertainty are likely having an impact on buyer confidence,” said Fratantoni.
Mortgage rates came down pretty sharply to start this week, according to a separate measure from Mortgage News Daily, as markets digested a potential de-escalation in the Iran war. They are, however, still elevated compared with before the war.
“This marks the best 2 days of improvement since the war began, but the caveat is that the larger movements are often seen after rates hit longer-term highs,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.
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A realtor gives neighbors a tour during an open house at a home in Palm Beach Gardens, Florida, on Jan. 11, 2026.
Zak Bennett | Bloomberg | Getty Images
Spring is traditionally the busiest season for home sales, and while this year’s market dynamics have shifted strongly in favor of buyers, broader forces in the economy are creating significant challenges.
The most important factor in any season is mortgage rates. They were expected to be lower this year, as the Federal Reserve dropped its lending rate to counter inflation, but the war with Iran has turned that on its head. The cost of oil is shooting higher, leading to rising inflation and causing the Fed to reconsider.
Now U.S. bond yields are rising, with mortgage rates following suit.
The average rate on the popular 30-year-fixed mortgage had started this year lower, even briefly dipping below 6% at the end of February, but it rose sharply this week to 6.53% on Friday, the first day of spring, according to Mortgage News Daily. It is now just 18 basis points below where it was a year ago.
Higher rates will weigh on affordability, but other factors have flipped the market in favor of buyers. Homes are sitting on the market longer, sellers are increasingly willing to lower prices and the supply of homes for sale is rising, albeit not as quickly as it should be.
“As the housing market approaches the ‘best time to sell’ season, it sits in a precarious position, caught between long-term improvements and sudden short-term instability,” Jake Krimmel, senior economist at Realtor.com, wrote in a Weekly Housing Trends report. “Everything seems much more unsettled and uncertain than it did just a month ago.”
For the week ending on March 14, active inventory was up 5.6% year-over-year, according to Realtor.com, but new listings were down 1.4%.
This means the number of homes for sale is climbing not because there are so many more sellers, but because the homes on the market are sitting. That may be because potential sellers who expected to put their homes on the market are holding back due to concerns about the implications of the Iran war.
“I think inventory is the bigger decider,” said Jonathan Miller, director of markets for StreetMatrix, a housing market data provider. “The idea that rates are going to noticeably come down this year, I think, is generally off the table.”
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Location, location
Given the disparity in inventory across different markets, this spring is likely to be a tale of many cities.
For example, in February, active listings in Las Vegas, Seattle, Cincinnati and Washington, D.C., were all up over 20% from a year ago, according to Realtor.com. Listings in San Francisco, Chicago, Miami and Orlando, Florida, meanwhile, were lower than a year ago.
Home prices had been cooling off for much of the past year, and they continue to do so. Prices were just 0.7% higher in January than they were in January 2025, according to Cotality. That’s down from the 3.5% annual growth at the beginning of 2025. Higher mortgage rates, however, are taking away from that improved affordability.
The Northeast and Midwest are seeing the strongest price appreciation, led by New Jersey, Connecticut, Illinois, Wisconsin and Nebraska, due to tighter supply in those regions, according to Cotality.
Cotality ranks 69% of top metropolitan housing markets as overvalued, noting undervalued markets like Los Angeles, New York City, San Francisco and Honolulu could see a rebound in prices in 2027.
“Ultimately, locations with consistent job growth will remain the primary engines for price appreciation, but they also have larger inventory deficits which are driving pressure on home prices,” Selma Hepp, Cotality’s chief economist, wrote in a recent report.
“Affordability for buyers and builders remains a top concern,” Bill Owens, chairman of the NAHB, said in a release. “Many buyers remain on the fence waiting for lower interest rates and due to economic uncertainty. Builders are facing elevated land, labor and construction costs and nearly two-thirds continue to offer sales incentives in a bid to firm up the market.”
Construction of single-family homes also dropped in January. While some are blaming rough winter weather for the weakness in the new home market, builders are consistently battling affordability for both their customers and their own bottom lines. Costs for land, labor and materials have not eased.
“I think this is not going to be an inspiring year for the housing market. It started out with high expectations. I think the war, whatever the outcome, has really dampened enthusiasm and kept uncertainty really high,” StreetMatrix’s Miller said.
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Canada’s middle class appears to be struggling with the higher cost of living, with new data showing more are taking on debt as financial pain bleeds out into broader sections of the economy.
It comes as the so-called “K-shape” economy continues to underscore a widening wealth divide between Canada’s highest and lowest income groups, with Equifax reporting debt among Canadians with higher credit scores is rising.
“There’s more of a divergence happening and a few of the higher income or low-risk people are kind of switching almost on that ‘K’,” says Rebecca Oakes, vice-president of analytics at Equifax Canada.
“Everything that’s happening right now is just going to add pressure to an already difficult situation where we did have diversions in financial health.”
Total Canadian consumer debt in the fourth quarter, or final three months of 2025, increased 3.13 per cent from a year earlier to $2.65 trillion, and non-mortgage debt increased by 4.5 per cent.
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Those with higher credit scores of between 751 and 880 out of the scale to 900 saw their non-mortgage debt rise by 6.1 per cent, while lower credit scores of 320 to 580 remained mostly the same, the report showed.
“It doesn’t really matter what your credit score is. What matters is how much income you have relative to your expenses. And so if your expenses are growing faster than your income, a 750 or 800 FICO score isn’t going to make you any wealthier,” says mortgage expert Clay Jarvis at NerdWallet Canada.
“So if anything, I would say having a higher credit score may have actually hurt some of these homeowners by allowing them to squeeze into these giant mortgages at a time when everything else is becoming more expensive.”
Affordability remains top of mind for many Calgarians
Missed payments on non-mortgage debt peaked at the end of December, Equifax says, with the number of Canadian households that missed a minimum debt payment by 90 days or more rising from 1.64 per cent to 1.73 per cent.
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That’s a 5.43 per cent increase from the previous year.
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The data may soon show more severe changes, too.
That’s because this data out now shows a snapshot from the end of 2025, and a lot has happened since then, including the Iran war, which is expected to lead to higher prices for gas at the pumps, groceries, and just about everything else.
“With all these headwinds in what’s happening this year since January, that’s just going to put more pressure,” Oakes says.
What is the ‘K-shape’ economy?
The K-shape economy refers to a sharp divide between higher-income earners being able to spend more over time without going into debt, while lower-income earners are losing purchasing power and have to cut back more and more to make ends meet.
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It’s effectively a visual cue to picture an economy where those on the upper end of the spectrum are able to continue increasing spending, while those on the lower end are declining.
A report from November 2025 showed this pattern unfolding based on survey data on expected holiday spending among consumers. Twenty-six per cent of shoppers said they planned on spending more than $1,000, while 46 per cent planned to spend less than $500, and 15 per cent said less than $100.
The Equifax data, Oakes says, shows a consistent result, where consumers did spend less than the year before.
“Our numbers are telling us is that there definitely is more concern, I think, coming from consumers in terms of affordability. We’re seeing that translate into spending behaviour,” she says.
“In the backend of last year, it was a holiday period. We saw quite a pullback in terms of spend by certain groups of consumers during that holiday period.”
Oakes adds that these higher debt levels, especially when including mortgage debt, were concentrated in British Columbia and Ontario, where cities like Vancouver and Toronto demand higher incomes to keep up with the relative cost of living, including for housing.
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Mortgage debt increased to $1.95 trillion in the fourth quarter of 2025, Equifax said, which was up 2.6 per cent from the previous year.
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A large wave of mortgage renewals was the main reason for this, Oakes says, and many Canadians locked in at higher interest rates than when they started in 2020, 2021 and early 2022, when rates were at multi-year lows.
“Stronger credit scores, maybe strong incomes, are able to kind of get hold of those higher balance mortgages. But the reality is that the payment shock they’re now seeing on renewal is just too much for them,” she says.
“Combine a cost of living increase with a payment shock if your mortgage is renewed at a higher rate or higher payment amount, and that, for some consumers, is just too much.”
On Wednesday, the Bank of Canada left its benchmark interest rate unchanged for the third straight meeting, but signalled the Iran war was raising the risk for Canada’s economy and the outlook is even more uncertain.
Some economists even suggested, based on what the Bank of Canada said after the announcement, that rates may even need to be increased in Canada if the war leads to long-term inflation spikes.
“It’s just it’s so hard to be positive about anything. Anybody I talk to about anything is feeling really really down and that’s just the overall sentiment when it comes to your finances,” says Jarvis.
“Anybody who is able to glide through this right now without having to worry about their finances every day … I don’t think they realize how lucky they are and what kind of a bubble they’re living in.”
In an aerial view, two-story single family homes line the streets on Jan. 14, 2026 in Thousand Oaks, California.
Kevin Carter | Getty Images
Mortgage rates last week jumped to the highest level since the end of last year, causing a crash in the growing refinance demand the market had been seeing at the start of this year. That pushed total mortgage application volume down 10.9% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, increased to 6.30% from 6.19%, with points increasing to 0.63 from 0.58, including the origination fee, for loans with a 20% down payment.
“Mortgage rates continued to move higher, driven by increasing Treasury yields as the conflict in the Middle East kept oil prices elevated, along with the risk of a broader inflationary shock. Mortgage rates increased across the board,” said Joel Kan, an MBA economist in a release.
Applications to refinance a home loan plunged 19% week-to week but were still 69% higher than the same week one year ago.
“Rates were around 20 basis points higher than they were two weeks ago, and this caused a reversal in refinance activity, particularly for conventional refinance applications, which decreased 27 percent over the week. Government refinances also declined but by 5 percent, as FHA rates have not increased quite as rapidly,” Kan added.
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Applications for a mortgage to purchase a home managed to eke out a 1% gain for the week and were 12% higher than the same week one year ago. The all-important spring housing market, which officially begins at the end of this week, is kicking off with slightly more inventory than last year, and interest rates are still 42 basis points lower than they were a year ago.
Affordability is improving, with prices now dropping in some markets and flat in others compared with last spring.
Mortgage rates moved slightly lower to start this week, according to a separate survey from Mortgage News Daily. While most Federal Reserve watchers do not expect the central bank to cut its interest rate at the open market committee meeting today, there is always a possibility that commentary from the chairman could move bond markets.
“Fed days can still cause volatility in rates, for better or worse. In [Wednesday’s] case, any impact from the Fed should be smaller than it otherwise would have been due to the market’s preoccupation with geopolitical influences,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.
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Don’t miss out on free cash (Picture: Shutterstock)
Last year, four million Nationwide customers received £100 each as part of the building society’s Fairer Share Payment initiative.
As Nationwide shares profits among members (rather than shareholders), the annual scheme has seen more than £1 billion issued as one-off loyalty ‘reward’ bonuses in the three years since its inception.
Whether it’ll return for 2026 likely won’t be confirmed until May. If it does, though, doing the groundwork now will ensure you’re in the best possible position to get hold of this welcome cash boost.
In the latest edition of his newsletter, Martin Lewis shared the Money Saving Expert (MSE) guide to maximise your chances for Nationwide’s ‘free’ £100.
Using Fairer Share eligibility from previous years, the site’s consumer finance gurus explain that qualifying ‘depended on whether you met the qualifying criteria in the first three months of the year.’
As such, it’s ‘likely your last chance to qualify’ — but existing customers and newbies alike can get everything in order with just a few simple (albeit slightly different) steps.
Existing Nationwide customers
Assuming the initiative comes with the same prerequisites as before, MSE says the first thing you need to do is keep any Nationwide current account(s) open until at least March 31, 2026.
The building society shares profits with its members (Picture: In Pictures via Getty Images)
Secondly, you have to use your current account during the first three months of the year, although what this entails depends on the type of account you hold:
FlexAccount, FlexBasic, FlexDirect: Either receive £500 and make two payments out of your account, make at least 10 outgoing payments, or complete a full current account switch from another provider to Nationwide.
FlexOne, FlexGraduate, FlexStudent: Either make at least one payment in or out of your account in March 2026, or complete a full current account switch to Nationwide FlexOne or FlexStudent (not FlexGraduate) by March 31, 2026.
FlexPlus packaged account: No payments in or out are required here, but you need to keep up with your fees to be eligible.
The third and final step is to ensure you have at least £100 in savings or owe at least £100 on a mortgage with Nationwide in March 2026.
If you don’t have either of these products with the building society, MSE claims it might be a good idea to ‘stick £100 (or maybe £200 to be safe in case it changes its terms) into one of its savings accounts.’
New Nationwide customers
If you aren’t a member but want to put your hat in the ring for a potential Fairer Share bonus payout, you’ll need to switch your current account over to Nationwide by March 31, 2026, at the very latest.
According to MSE, the £175 bonus, 5% interest on up to £1,500 deposited, and up to £5 a month cashback on debit card spending for a year, offered when you sign up to a FlexDirect account, ‘makes it a good all-rounder.’
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Better still, though, ‘if Nationwide keeps the same eligibility criteria as previously, it’s easier to get the Fairer Share payment by switching than it is being an existing customer, as fewer rules apply.’
Keep in mind, you must use the official Current Account Switch Service (CASS) to qualify, which you’ll see as an option when applying. And since the process normally takes seven working days to go through, it’s better to do so earlier rather than later.
After you switch, MSE says you’ll also need to have at least £100 in a Nationwide savings account or at least £100 left on a Nationwide mortgage in March 2026.
Additionally, the site warns that previous bonuses have been treated as taxable savings income, and although this won’t affect most people, it may be an issue for higher-rate taxpayers or those with a substantial amount in non-ISA savings.
When will the Nationwide bonus be paid out?
If the mutual bank does decide to bring back Fairer Share Payments for 2026, the decision is usually announced after Nationwide’s full-year results are released in May.
Last time around, eligible members were contacted by May 31, with bonuses deposited into members’ accounts between June 18 and July 4, 2025 — and since the scheme has followed a similar timeline in previous years, the cash could very well be yours before summer.
That said, nothing is confirmed yet, so we’ll keep you posted with updates on this year’s initiative as and when they’re available.
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Get in touch by emailing MetroLifestyleTeam@Metro.co.uk.
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In an aerial view, two-story single family homes line the streets of neighborhood on Jan. 13, 2026 in Thousand Oaks, California.
Kevin Carter | Getty Images
Mortgage rates surged to their highest level since September on Friday as bond yields moved higher due to the war in Iran.
The average rate on the 30-year fixed loan hit 6.41%, according to Mortgage News Daily. That is the highest rate since the first week of September, but still below the 6.78% notched at the same time last year.
Mortgage rates loosely follow the yield on the 10-year U.S. Treasury, which were up again Friday.
“This is counterintuitive for those who expect bonds to serve as a safe haven in times of uncertainty, but when war has a direct impact on inflation expectations, it’s more than enough to offset any of the safe haven benefit that might otherwise be seen,” wrote Matthew Graham, chief operating officer at Mortgage News Daily.
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Even as rates began rising last week, mortgage demand from homebuyers rose, according to the Mortgage Bankers Association, but this week’s new surge could put a damper on the spring season, which is already plagued by other major headwinds.
Lennar, one of the nation’s largest homebuilders, reported disappointing first-quarter earnings. Its CEO, Stuart Miller, described headwinds for the broader market as including “high mortgage rates, constrained affordability, cautious consumer sentiment, and geopolitical uncertainty, especially now including the recent conflict in Iran.”
Just two weeks ago, rates had dropped to match a multiyear low, briefly touching 5.99%. Now, any savings from those lower rates is gone.
For someone buying a $400,000 home, around the national median, with 20% down on a 30-year fixed mortgage, the monthly payment is now about $115 more than it would have been two weeks ago.
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Prospective buyers arrive during an open house at a home in Seattle, Washington, US, on Sunday, Jan. 18, 2026.
David Ryder | Bloomberg | Getty Images
Mortgage rates dropped sharply last week, and while that helped to prolong gains in refinancing, homebuyer demand seemed unimpressed.
Total mortgage application volume was essentially flat, rising just 0.4% compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, decreased to 6.09% from 6.17%, with points falling to 0.53 from 0.56, including the origination fee, for loans with a 20% down payment. That was the lowest level since September 2022.
Applications to refinance a home loan increased 4% last week from the week before and were 150% higher than the same week one year ago, when rates were 79 basis points higher. Refinancing has been on a bit of a tear lately, as rates drop. While the comparisons to a year ago are quite large, it is important to take into account that refinancing was quite low at this time last year.
Applications for a mortgage to purchase a home dropped 5% for the week and were 12% higher year over year. While lower mortgage rates are improving affordability, home prices are still slightly higher than they were at this time last year and economic uncertainty is weighing heavily on consumers.
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Redfin cited this uncertainty in a report showing that nearly 40,000 home sale agreements nationwide were canceled in January, equal to 13.7% of homes that went under contract. That’s up from 13.1% a year ago and the highest January share in records dating to 2017.
Borrowers also sought more savings in adjustable-rate mortgages, which are slightly riskier but offer lower rates.
“The ARM share stayed above 8 percent, as ARM rates remained more than 80 basis points below conforming fixed rates,” said Joel Kan, an MBA economist, in a release. “This is giving payment-sensitive borrowers or those seeking larger loans, an incentive to choose this product offering.”
In an aerial view, two-story single family homes line the streets on Jan. 14, 2026 in Thousand Oaks, California.
Kevin Carter | Getty Images
Mortgage interest rates dropped last week to the lowest level in a month, prompting more current borrowers to seek savings in a refinance. While lower rates didn’t give potential buyers much incentive, the run on refinances was enough to push total mortgage demand 2.8% higher compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, decreased to 6.17% from 6.21%, with points remaining unchanged at 0.56, including the origination fee, for loans with a 20% down payment.
“Treasury yields ended the week lower as weaker data on retail sales and home sales outweighed better-than-expected readings on the job market for January,” said Joel Kan, vice president and deputy chief economist at the MBA, in a release.
As a result, applications to refinance a home loan rose 7% for the week and were 132% higher than the same week one year ago. Last year, rates were 76 basis points higher. While that annual jump may seem large, refinancing was at extremely low levels at this time last year.
“Refinance applications increased across all loan types, marking the strongest week for refinancing since mid-January,” Kan added.
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Applications for a mortgage to purchase a home dropped 3% for the week and were just 8% higher than the same week one year ago. While lower mortgage rates are making homes slightly more affordable, new supply is not coming onto the market fast enough, and concern over the broader economy has consumers sitting on the sidelines.
Mortgage rates didn’t move at all to start this holiday-shortened week, but economic data set for release this week could impact the current trajectory. In general, however, mortgage rates have been hovering in a pretty narrow range, between 6% and 6.25%, since the start of this year.
