Iran Conflict Lifts Mortgage Rates, Housing Demand Holds

Escalating conflict in Iran last week led to an increase in mortgage rates, yet housing demand demonstrated resilience, maintaining positive year-over-year growth. Pending home sales data for the week ending July 7, 2026, recorded 63,971 sales, a year-over-year increase from 61,143 sales in the same week of 2025. This figure, despite the traditional impact of the July 4th holiday weekend on weekly data, indicates sustained buyer interest.

Mortgage purchase application data, a forward-looking indicator for the next 30-90 days, also reflected this positive trend. While there was a 1% week-to-week decline in purchase applications, the data showed a 5% year-over-year growth. Throughout 2026, purchase applications have largely exhibited positive year-over-year growth, with 24 weeks of positive year-over-year prints and 10 weeks of double-digit year-over-year growth recorded. This contrasts with 13 negative week-to-week prints and only 11 positive week-to-week prints, suggesting a steadier long-term demand than short-term fluctuations might imply.

Housing inventory levels have recently turned negative year-over-year, a development not unexpected by observers of the housing market. However, the overall demand metrics suggest that this inventory shift has not yet significantly dampened buyer activity. The data collection for the week was also impacted by the July 4th holiday, and analysts anticipate a rebound in next week's figures, urging context when interpreting the current numbers. The tracker data aims to provide a week-to-week perspective, with pending sales typically reflected in broader sales data within 30-60 days.