March 17, 2026 – Are All Bets Off?

Economic Commentary

The Federal Reserve’s Open Market Committee meets this week. A few weeks ago, market prognosticators were absolutely sure there would be no further movement by the Fed to lower rates again for the foreseeable future. Afterall, we have seen some positive economic news, and it is obvious that the fight against inflation is not finished by any means. Oh, we have had a plethora of economic news to chew on in addition to the inflation data – including the most recent jobs data showing that the economy had lost over 90,000 jobs last month.

 But as we always warn our readers, predictions are futile because there is always the imposition of unknowns hitting us when we least expect it.  Two weeks ago, we had no idea that the Fed would be meeting in the middle of a regional war sparked by our own country.  It is not unusual for the Fed to act to calm the markets when there are significant occurrences causing major disruptions.  And certainly, the situation in the Middle East qualifies as such.

Of course, with the Fed there are also counterbalancing forces. In this case the price of oil is one such phenomenon. Surging oil prices certainly have the ability to cause a rekindling of world-wide inflation. And it is not just the price of energy that could be affected, as wars have a direct effect of increased government spending for such things as military hardware and reconstruction of affected countries. Thus, the Fed faces a major conundrum.  The stability of the markets will be paramount, but the long-term effects of war are going to factor into the equation. Certainly, these are very interesting and sober times we are experiencing today.

Weekly Interest Rate Overview

The Markets. Rates increased in the past week as the markets reacted to energy prices rising due to the conflict in the Middle East. According to the Freddie Mac weekly survey, 30-year fixed rates rose to 6.11% last week from 6.00% the previous week. In addition, 15-year loans increased to 5.50%. A year ago, 30-year fixed rates averaged 6.65%, 0.54% higher than today. Attributed to Freddie Mac: “The 30-year fixed-rate mortgage returned to last month’s level of 6.11%. Despite the modest uptick, buyers are responding to rates in this range, with existing home sales increasing 1.7% in February. Purchase applications also increased this week, a welcome sign as buyers enter spring homebuying season with rates down more than half a percentage point compared to the same time last year.” Note: Rates indicated do not include fees and points and are provided for evidence of trends only. They should not be used for comparison purposes.

Real Estate News

A median-income American household can now afford a $331,483 home, a $30,302 improvement since last year and the highest affordable price since March 2022. a new Zillow analysis shows. According to the analysis, a median-income household has seen roughly 82,300 more homes come into its budget than a year ago. Lower mortgage rates and rising incomes have made the difference. Zillow said it forecasts further dips in mortgage rates this year and that could lead to additional improvements in buying power. Improving affordability points to a more active home shopping season this spring, Zillow noted. The typical mortgage payment — excluding taxes and insurance, and assuming a 20% down payment — is 8.4% lower than a year ago, Zillow’s analysis stated. According to the analysis, home value growth has flattened, and mortgage rates have fallen from an average of 6.96% in January 2025 to 6.10% last month. Incomes have edged higher, Zillow said.  Together, Zillow noted that it gives a median-income household an extra $30,302 in buying power. Zillow stated that affordability is still challenged — a median-income household would spend 32.3% of that income on a typical mortgage payment — but that additional $30,000 in buying power can mean the difference between settling and choosing for home buyers this year. Buying power is at its highest level since March 2022, when mortgage rates were still below 5%, Zillow stated. Improving affordability and rising inventory indicates that buyers should have more options within reach than in recent years. A $30,000 increase in buying power can make available a different neighborhood, a bigger home, or a home with fewer compromises. Source: MP Daily

Are lower prices mixed with lower rates the winning combo? More builders and sellers are hoping a lower price will boost sales. Home buyers are gaining more negotiating leverage—and many are zeroing in on the price of listings. They’re increasingly finding discounts, too. As home sales remain sluggish this winter, more sellers are reducing their asking prices. In the new home market, homebuilders are leaning heavily on price cuts and incentives—more than at any point in recent years—in trying to bring more buyers to the closing table. In February, 36% of builders reported cutting prices, with an average price reduction at 6%, according to the National Association of Home Builders. Another 65% offered incentives such as closing cost assistance, mortgage rate buydowns or design upgrades.  The new home market’s growing concessions are putting pressure on sellers of existing homes to stay competitive. Nationally, about 18% of existing home listings had a discount as of late 2025. What’s more, nearly 11% of active listings, as of January, had at least three price cuts, according to a new analysis from realtor.com® of homes listed at its site.  While price cuts are increasing, most homeowners are still sitting on significant equity gains over the past several years. Since January 2020, the typical homeowner has accumulated $130,500 in housing wealth, according to National Association of REALTORS® research.  For buyers, “affordability conditions are improving,” says Lawrence Yun, NAR’s chief economist. NAR’s Housing Affordability Index shows housing is at its most affordable level since March 2022, largely because wage growth has outpaced home price gains and mortgage rates are at the lowest level in three years. Source: NAR

Millennials and Gen Zers are willing to significantly reduce discretionary spending to be able to buy their first home, according to a new survey, but many are unsure that will be enough to overcome affordability barriers. The survey, conducted in January by a third-party research panel commissioned by Mercury Insurance, found that 73% of respondents would cut back on discretionary purchases to afford a home. The most common items they were willing to give up were luxury items (73%), sporting event tickets (64%), food delivery (61%), alcohol (60%) and concert tickets (52%). The millennial generation is typically defined as people who are currently between the ages of 30 and 45, while adults in the Generation Z cohort are 18 to 29. Collectively, 32% of respondents in those cohorts indicated they are unsure if they will ever own a home, while 97% said their respective generation faces greater homeownership hurdles than previous generations.  Prospective homebuyers from younger generations are flexible on location, the survey found. Among millennials, 28% were willing to move more than 50 miles from their desired location. Among Gen Zers, that figure was 23%. About a third of both generations are willing to get a second job, delay having kids or temporarily move in with their parents if it means becoming a homeowner, the survey found. But many drew a line in the sand on other concessions, with just 19% saying they would delay further education and just 21% willing to move to a “less desirable area.”   Source: Scotsman Guide