By the Numbers

A new forecast from Zillow’s chief economist shows just how much the current geopolitical situation could affect the 2026 U.S. housing market.

Weekly average mortgage rates just hit another 2026 high — but not all of the latest economic data spells doom and gloom for real estate’s busiest time of year.

Rates fell below a key threshold in February, setting the stage for a more promising home-shopping season. Now, we could be stuck in a familiar, anemic pattern.

While the median price of an existing home has remained relatively flat, prices of new and manufactured homes have fallen since the pandemic-era buying frenzy.

There were 46.3% more homesellers than buyers in the U.S. housing market in February, according to Redfin data — the largest gap since at least 2013.

Three weeks into the war in Iran, mortgage rates have climbed above 6.5% — the highest level in over six months — after dipping briefly below 6% in February.

The year began with the slowest new home sales pace since October 2022. But inventory is up and the median price has fallen — both positive signs for buyers.

Concerns about inflation and the wider U.S. economy are driving up mortgage rates as the housing market embarks on what is typically its busiest time of year.

Mortgage rates didn’t shift significantly after the Fed’s unsurprising announcement, but rising prices — not rates — could be a bigger concern for homebuyers.

The year-over-year decline suggests factors like economic uncertainty, affordability may “further tighten the market just as the buying season hits its stride.”

Some markets could see inventory go up if sellers have "the option to gauge interest in their homes before listing," according to a Redfin analysis.

Concerns about the war in Iran are adding to widespread economic anxiety as mortgage rates — which recently hit three-year lows — start ticking back up.

Existing home sales rose slightly in February, but lagged behind last year’s pace. How consumers react to economic uncertainty may be key to sales this spring.

The U.S. lost 92,000 jobs in February, but economists expect the Fed to stick to its wait-and-see approach while employment data remains “volatile.”

The Middle East conflict “just added to the anxiety pile” for buyers and sellers already concerned about economic uncertainty, dampening sales activity.

After hitting three-year lows last week, mortgage rates jumped in the war’s first few days — but the rise could be temporary if the conflict doesn’t last long.

The U.S. had a deficit of 4.03M homes in 2025 — up from 3.8M in 2024 and the third-largest supply gap of the past 14 years, according to Realtor.com data.

The average weekly rate dipped below 6% for the first time in more than three years — a threshold that could unlock buyers (and sellers) this spring.

While affordability remains a challenge, lower mortgage rates and increases in inventory are giving buyers some wiggle room as they search for their next home.

The slowdown is increasingly tied to hiring confidence and stalled migration — not just sub-3% mortgages, according to Compass Chief Economist Mike Simonsen.