Housing Slows as Mortgage Rates Top 6.64% and Iran Conflict Enters 2.0

3 articles · Updated · HousingWire · Jul 18

Pending home sales slipped slightly below last year’s level after mortgage rates stayed above 6.64% most of last week, with 66,654 contracts versus 66,680 a year earlier.
Purchase applications fell 7% week over week and 2% year over year—only the third negative annual reading of 2026—signaling demand is softening as rates approach the top of the 5.75%-6.75% forecast range.
Mortgage-spread improvement is still cushioning the market: last week’s 1.97% spread kept rates near 6.63%, versus 7.20%-7.77% under the weaker spread conditions seen in 2023-2025.
Inventory rebounded seasonally to 859,359 from 844,011, new listings edged up to 74,250 from 73,270 a year ago, and price cuts at 40.21% remained slightly below last year’s 41%.
Oil-driven inflation risks from the Iran conflict could amplify hawkish Fed pressure and keep bond yields elevated, leaving upcoming bond auctions and new-home-sales data under a geopolitical shadow.