Today,
HousingWire
Lead
Analyst
Logan
Mohtashami
wrote

an
article
about
how
mortgage
rates
were
moving
as
a
result
of
the
Iran
conflict,
noting
that
while
the
reaction
had
been
more
muted
than
expected
so
far,
the
bond
market
is
starting
to
price
in
those
effects.

Last
week,
before
the
U.S.
bombed
Iran
on
Saturday,
industry
leaders
said
conditions
were
strong
going
into
the
spring
home-buying
season.

Matt
Vernon,
head
of
consumer
lending
at

Bank
of
America,
said
that

the
arrival
of
sub-6%
rates
for
the
first
time
in
more
than
three
years
would
give
home
shoppers
additional
confidence
and
improved
affordability.
Vernon
reported
that
mortgage
application
demand
and
funding
volumes
at
BofA
are
up
more
than
20%
year
over
year.

“Inventory
has
been
a
consistent
challenge
for
buyers,
and
while
more
borrowers
now
have mortgages above
6%
than
below
3%,
lower
rates
could
encourage
some
to
consider
a
move,
though we’d expect
this
to
happen
gradually,”
Vernon
said.
“In
many
cases,
life
events
drive
decisions
more
than
rates
alone,
but
lower
rates
could
be
the
nudge
some
buyers
and
current
homeowners
have
been
waiting
for.”

More
foreclosures
add
to
supply

Marty
Green,
principal
at
mortgage
law
firm

Polunsky
Beitel
Green,
said
in
written
commentary
that
he
expects
three
market
dynamics
to
be
a
“robust
catalyst
for
a
market
rebound
in
2026.”

Lower
mortgage
rates,
more
competitive
listing
prices
and

higher
foreclosure
volume
have
“injected
fresh
energy
into
the
market,
driving
activity
during
the
early
spring
buying
season,”
Green
said.

“A
rise
in
foreclosure
activity
—
mostly
resulting
from
the
implementation
of
more
limited
loan
modification
policies
for
distressed
borrowers
—
is
bringing
more
properties
to
market,”
he
added.
“While
these
circumstances
are
difficult
for
the
affected
homeowners,
the
resulting
sales
provide
a
necessary
increase
in
affordable,
entry-level
housing.
It
also
places
this
inventory
in
the
hands
of
owners
who
may
have
greater
means
to

maintain,
and
even
improve,
the
property.”

Cautious
optimism
for
sales

Sam
Williamson,
senior
economist
at

First
American,
released
an
analysis
of
the
spring
homebuying
market
last
week
in
which
he
said
that
more
supply
could
help
snap
a
three-year
slump
in
home
sales.

“The
increase
in
sales
activity
late
last
year
coincided
with

house-buying
power
moving
back
above
the
median
list
price
nationally,”
Williamson
said.
“Whether
price
growth
stays
contained
this
spring
will
depend
in
large
part
on
how
supply
evolves
relative
to
demand.
If
supply
remains
tight
and
house-buying
power
stays
ahead
of
list
prices,
the
spring
home-buying
season
may
break
out
of
a
three-year
slump,
even
if
just
modestly.”

After

Freddie
Mac
reported
last
week
that
mortgage
rates
had
dropped
below
6%
for
the
first
time
since
September
2022,

Bright
MLS
chief
economist
Lisa
Sturtevant
looked
to
temper
expectations
for
more
home
sales.
She
pointed
to

Mortgage
Bankers
Association
data
showing
that
while
purchase
loan
applications
were
up
12%
year
over
year,
they
actually

declined
5%
from
the
prior
week,
indicating
that
buyers
and
sellers
haven’t
sprung
to
life
just
yet.

“There
are
still
reasons
why I’m only
cautiously
optimistic
about
the
spring
housing
market,”
Sturtevant
added.
“While
overall
economic
numbers
appear
solid,
economic
uncertainty
is
still
weighing
on
the
minds
of
many
prospective
homebuyers
and
sellers.

“In
addition
to
rates
moving
lower,
people
also
are
waiting
for
signs
of
stability,
both
in
terms
of
rates
and
the
economic
and
political
environment.
Wildcards
like
new

tariffs,
private-sector
layoffs,
changes
in

Federal
Reserve

leadership
and
potential
international
conflict
could
cast
a
shadow
over
the
sunny
lower-rate
environment.” 

Further
developments
that
are
likely
to
impact
mortgage
rates
are
arriving
soon.
The

U.S.
Bureau
of
Labor
Statistics
will
release
February
jobs
data
on
Friday,
and
the
next
Fed
meeting
is
about
two
weeks
away.
Interest
rate
traders
are
nearly
unanimous
that
the
federal
funds
rate
is
likely
to
stay
at
a
range
of
3.5%
to
3.75%
this
month,
according
to
the


CME
Group’s
FedWatch
tool.