Today, the MBA’s purchase application data showed 4% week-to-week growth and 7% year-over-year growth, even though mortgage rates are near yearly highs and inflation data has recently been rising.

Over the past few years, mortgage rates would already have been over 7% with the 10-year yield at its current level because mortgage spreads were worse in 2023-2025. However, this year the spreads are closer to normal, and we have a lot of Fed rate cuts in the system. And so far, the Fed hasn’t been guiding the markets toward a rate hike.

For now, mortgage demand has held up. Let’s take a look at the 2026 data so far.

Purchase application data year to date

Here’s 2026 so far: Mortgage rates have ranged between 5.99% -6.64%

• 9 positive week-over-week prints
• 8 negative week-to-week prints
• 1 flat week-to-week print
• 9 weeks of double-digit year-over-year growth
• 16weeks of positive year-over-year growth
• 2 negative year-over-year print

Typically, when mortgage rates get above 7% the housing demand data gets weaker and when mortgage rates get below 6.64% and head toward 6% the data improves. So far this year, mortgage rates haven’t broken above 6.64%.

Now that inflation is rising, we see more Fed governors talking hawkishly. Just today, Boston Fed President Susan Collins said current policy is “well positioned,” but emphasized rates may need to stay restrictive for an extended period. She also mentioned that rates could even rise if inflation persists. We are getting more and more Fed hawks as the Iran conflict continues.

Can housing finally grow?

Last year, the housing dynamic shifted when mortgage rates fell below 6.64% and headed toward 6%, resulting in a 9-month high in sales in December of 2025. Then we had a holiday, an epic snowstorm, and the start of the Iran conflict, all of which pushed rates higher.

My HousingWire 2026 forecast called for 237,000 more existing home sales, assuming mortgage rates stay below 6.25%. We still have some time left in the year for growth, but if mortgage rates rise above my peak forecast of 6.75% in the second half of the year due to inflation and tighter spreads, that growth level becomes much harder to achieve. However, if the conflict ends and yields and rates fall, just back to under 6.25%, we have a shot.

Conclusion

The 10-year yield is at a yearly high today after the hotter PPI inflation print, and even though Kevin Warsh will be the new Fed Chairman, getting rate cuts with rising CPI, PPI and PCE inflation, along with oil prices over $100 and the unemployment rate at 4.3%, will be difficult.

For now, housing has stayed firm, but we are getting closer to mortgage rate levels where the demand tends to slow down. One thing is for sure in 2026, the hero for the housing market has been mortgage spreads; if not for that, housing demand data would have slowed down already.