09/19/2026
This chart is absolutely fascinating. And if you’re a housing/economics nerd like me, you can probably stare at it longer than is socially acceptable.
The white line tells the story of the housing market from 2000 through today: the slowdown surrounding the 2001 recession and 9/11, the enormous housing boom of the mid-2000s, the housing and credit crisis that followed, the long recovery, and then a relatively normal market from roughly 2015 until COVID.
Then things got weird.
COVID hit in early 2020 and housing activity initially fell off a cliff. Then the market absolutely rocketed as mortgage rates plunged, demand exploded and housing became one of the hottest tickets in America.
And then came inflation and dramatically tighter monetary conditions.
Look at the yellow line. That’s the 30-year fixed mortgage rate. Rates went from roughly 3% during the pandemic era to the 6%–7% neighborhood, while home sales collapsed. Freddie Mac’s survey actually dipped below 6% briefly in February 2026—the first sub-6% reading since 2022—but the latest reading is back up to 6.95%.
This isn’t exactly quantum physics. Raise the cost of financing something dramatically and, all else equal, fewer people can afford to buy it. Housing has another wrinkle: millions of existing homeowners are sitting on mortgages far below today’s rates, which can make them reluctant to sell and give up that financing.
We appeared to be getting some meaningful rate relief earlier this year. Then geopolitics decided to throw another chair into the room.
The conflict involving Iran has created very real risks around Middle Eastern energy supplies and the Strait of Hormuz. Recent disruptions have affected oil infrastructure and shipping, contributing to renewed inflation concerns.
And dealing with Iran is a little like trying to pick up a turd by the clean end.
There is no clean end. It’s messy no matter where you grab it.
Where do we go from here? Nobody gets to know that with certainty. My expectation is that once the geopolitical and inflation pressures eventually ease, mortgage rates have room to trend lower again.
And THAT is where housing gets interesting.
If rates decline meaningfully, affordability improves and a whole bunch of buyers who have been sitting on the sidelines may come back into the market. If demand returns faster than inventory, that could put renewed upward pressure on home prices—particularly for attractive, well-kept homes.
So rather than trying to perfectly time the bottom in mortgage rates, I think buyers should at least consider the alternative strategy:
Buy the right house when competition is relatively soft. Negotiate while you have leverage. Then, if rates decline later, look at refinancing.
There are no guarantees that rates fall or that home prices rise, of course. But waiting for dramatically lower rates could also mean waiting until a whole lot of other buyers have the exact same idea.
We lend in every state except New York.
If I can ever be a resource for you—or help one of your friends or family members make sense of this crazy market—holler.
Brent McDonald | Mortgage Banker
602-549-7090
