Economists continue to be cautious about the direction of mortgage rates, saying the spring market outlook remains unclear and further decreases could depend on weather the ceasefire in the Middle East remains intact. 
The average mortgage rate ticked down 7 basis points to 6.30%, down from 6.37% last week, according to the latest Primary Mortgage Market Survey® (PMMS®), released by Freddie Mac Thursday.

Bright MLS Chief Economist Lisa Sturtevant said that while the ceasefire announcement earlier this month may have temporarily eased mortgage rates, the outlook for the spring market is still unclear.  “Mortgage rates are probably going to remain volatile as there is still significant uncertainty about a long-term resolution of the conflict with Iran,” Sturtevant said. “In addition, inflation in March rose to 3.3% and this higher inflation, which was tied heavily to energy and global shipping, means lower rates are unlikely in the short term.”  
Calling the spring housing market “a toss-up,” Sturtevant noted new listings increased in March, signaling sellers are gearing up for the spring. “However, we’re not sure if the higher inventory will be enough to entice buyers into the market. Higher rates continue to erode buyer purchasing power and uncertainty continues to give prospective buyers pause,” she said. 

Realtor.com Senior Economist Anthony Smith agreed saying this week that “the durability of this rate decline hinges on whether the ceasefire holds and evolves into a more lasting resolution. Until there is greater clarity on the geopolitical front, mortgage rate volatility is likely to remain elevated, and any improvement could prove temporary.”

Smith added that the housing market continues to show signs of strain under the weight of elevated rates and broader economic uncertainty, noting March existing home sales fell 3.6% from February to a seasonally adjusted annual rate of 3.98 million, with sales declining month-over-month in all four regions. 
But he said for sellers considering a move, the timing is favorable. 

“Sellers who list now can get ahead of the late-spring surge in new listings that typically intensifies competition,” he said. “For buyers, any ceasefire-driven dip in mortgage rates represents a potential window to lock in slightly more favorable financing, though affordability challenges will persist until rates move meaningfully lower and inventory continues to build.”

Freddie Mac provided some historic perspective, noting this week’s average 30-year-fixed rate is much lower than last year. “Mortgage rates declined this week to a four-week low of 6.30%,” said Sam Khater, Freddie Mac’s chief economist. “Compared to one year ago when rates were at 6.83%, this is a meaningful improvement for homebuyers during what is typically the busy spring homebuying season.”

To view the full report from Freddie Mac, click here. 

• 
• 
• 
•