How the housing market survived the Iran conflict

Now that the Iran conflict is behind us and oil prices have fallen significantly, we can hopefully move into the second half of 2026 with less drama for housing. It would be great if the economic backdrop was less like an episode of 24 and more like Saved by the Bell.

How did housing hold up with oil prices above $100 at one point, and some people talking about three Fed rate hikes in 2026? Let’s take a look at the data and wrap up the first half of 2026. Note that, as always, there is some impact on our weekly data from any three-day holiday. Juneteenth was two Fridays ago and some people take that three-day holiday to go on vacation. And of course, the July 4th holiday is right around the corner.

Total pending home sales

Our total pending home sales data is different than our weekly total pending sales data as it’s more of an average duration of sales rather than something weekly. As you can see below, housing demand not only survived the first half of 2026 but has done better than last year, mostly due to the fact that mortgage spreads have improved so much over the years. 2026 mortgage rates had the lowest start to the year since 2022. Also, affordability has gotten slightly better over the past two years and wage growth has outpaced home-price growth. 

Here are the total pending sales for last week over the last two years:

• 2026: 429,242
• 2025: 396,741

Mortgage purchase application data

Purchase application data is a forward-looking indicator: growth here leads home sales by roughly 30-90 days. Since late 2022, anytime we have seen at least 12-14 weeks of week-to-week growth, we tend to get a couple of hundred thousand more home sales. This year, the week-to-week data has been mostly flat, but the year-over-year growth data has been positive outside of two weeks, which had hard comps on a year-over-year basis. 

This year’s growth is a bit more legit than last year’s, which was working from an extremely low base, so the percentage growth needs context. The Iran conflict didn’t damage this data line too much on the negative side; a better premise is that the growth rate was probably slowed just a tad.

Here are the stats on purchase apps so far in 2026:

• 10 positive week-to-week prints
• 12 negative week-to-week prints
• 2 flat week-to-week prints
• 10 weeks of double-digit year-over-year growth
• 22 weeks of positive year-over-year growth
• 2 negative year-over-year prints

Weekly pending sales

Our pending home sales data provides a week-to-week perspective, though results can be affected by holidays and short-term fluctuations. Our weekly pending sales data typically takes 30-60 days to be reflected in the sales data. 

While last week did have a slight year-over-year decline — off a harder comp — the biggest variables slowing this data line since mid-June 2025 were the winter holidays and the epic snowmageddon storm in January. Mortgage rates haven’t risen above 7% this year, thanks to spreads, and the housing data has held firm. Of course, the growth rate of sales would have been better if rates stayed under 6.25% for the entire year, but considering everything that has gone on, not bad. 

Here are the pending sales for last week over the last two years:

• 2026: 72,222
• 2025: 74,130

10-year yield and mortgage rates

In the 2026 HousingWire forecast, I anticipated the following ranges:

• Mortgage rates between 5.75% and 6.75%
• The 10-year yield fluctuating between 3.80% and 4.60%

The biggest question I have heard from our audience is: Now that the oil markets believe the conflict is ending and oil prices are back down to more normal levels, why haven’t mortgage rates gone below 6.50%? Last week, I explained what is happening in this article with charts and in this episode of the HousingWire Daily podcast. 

Monday’s podcast will cover the Fed and what can drive rates lower or higher from here. However, considering what happened with oil prices over $100 and PCE inflation over 4% this year, the 10-year yield at 4.37% is a blessing.

Mortgage spreads

This week’s mortgage spread discussion is going to be very simple: without mortgage spreads getting closer to their normal recent range of 1.60%-1.80% this year, I wouldn’t be writing this article today. If we had the worst spreads of 2023 woth the 10-year yield at its current level, mortgage rates would be closer to 8%. Even with the spreads of 2024-2025, mortgage rates would have been above 7% most of the year. Mortgage spreads were the best defense against the Iran conflict, higher oil and higher inflation data.

Housing inventory

Housing inventory has been the surprising story of housing for 2026, unless you were reading our Housing Market Tracker since mid-June 2025, when the housing market shifted and the year-over-year growth from the first half of 2025 couldn’t be sustained. For the past 12 months I’ve been explaining that inventory growth will slow. We shouldn’t be shocked by some negative year-over-year prints heading into mid-June as the comps were going to be difficult to show growth. Now that we are past mid-June, those low comps are over, and now it’s going to be a good fight between buyers and sellers. 

• Weekly inventory change: (June 19-June 26): Inventory rose from 830,939 to 841,547  
• Same week last year: (June 20-June 27): Inventory rose from 828,890 to 831,050

New listings

Seasonality in the new listings data is here; we are starting the traditional decline. Traditionally, we would see 80,000-100,000 new listings during the seasonal peak weeks, but we’ve only cracked above 80,000 four times this year and never in back-to-back weeks. However, the conflict hasn’t changed the new listings data from its normal trend this year, which is another victory for housing. And remember that last weekend was three-day holiday. 

Some context for those who believe that the new listings data resembles the housing bubble years: new listings during that time ranged from 250,000 to 400,000 per week for several years. Several years!

Here is last week’s new listings data for the past two years:

• 2026: 75,128
• 2025: 81,059

Price-cut percentage

Typically, about one-third of homes undergo price reductions before they sell, reflecting the dynamic nature of the housing market. For the most part, price-cut percentages this year have been lower than last year.

In my 2026 home-price forecast, I had a negative 0.62% call for the year nationally. Home-price growth really isn’t going anywhere this year, but the percentage of price cuts has been lower year over year for most of 2026. If we see rates fall, demand picking up and inventory going negative year over year, my forecast will have a hard time being correct. However, for 2026 this has been good news for housing as wage growth outpaced home prices once again.

The price-cut percentage for last week:

• 2026: 39.05%
• 2025: 40%

The week ahead: Jobs week, Iran and home prices

We’ve had the usual weekend war games with Iran but the markets have gotten more accustomed to these events. We’ll see if it means anything for oil prices and rates on Sunday night. 

However, more importantly, it’s jobs week and the data will show if the Fed gets what it wants in the labor data: strong job growth with breadth. I believe that anything over 33,000 jobs, being diversified, will be fine with the Fed. This will most likely be our last jobs report that will reflect hiring for the World Cup — we will see a hit to the jobs report once that fades out.

This week we will also get the S&P Cotality Case-Shiller home price index, which will show more of the same: there’s not too much happening with home prices this year. Hopefully, we can move on from this conflict and get back to the economic data mattering more than missiles and drones.