U.S. home prices inch up in March as higher mortgage rates threaten demand
Persistently tight housing supply keeps U.S. single-family home prices slightly higher in March despite growing pressure on affordability. The modest gain comes as the war with Iran lifts Treasury yields and mortgage rates, a shift that is likely to weigh on buyer demand.
Highlights
- U.S. single-family home prices edge up 0.1% in March after a revised 0.1% dip in February, with annual growth steady at 1.7%.
- Freddie Mac data show the average 30-year fixed mortgage rate hit 6.51% last week, the highest level in nine months, rising from 5.98% at February's end.
- Regional disparities persist as East North Central home prices rise 5.1% year-over-year while West South Central prices fall 0.9%, revealing uneven market dynamics.
March price data and borrowing costs
As reported by the Federal Housing Finance Agency and Reuters, U.S. single-family house prices rise 0.1% in March after a downwardly revised 0.1% decline in February. February prices were previously reported as unchanged.Prices increase 1.7% in the 12 months through March, matching the annual gain recorded in February. In the first quarter, house prices rise 1.7% compared with the first three months of 2025.
The war involving Iran pushes oil prices higher and adds to inflation pressures, lifting U.S. Treasury yields. Mortgage rates closely track the 10-year Treasury note, whose yield hovers near a one-and-a-half-year high.
Freddie Mac data show the average rate on a 30-year fixed mortgage is 6.51% last week, the highest level in nine months. That compares with 5.98% at the end of February, when the war started, as Freddie Mac and Fannie Mae expanded purchases of mortgage-backed securities.
Regional performance and housing market outlook
House prices continue to draw support from a shortage of previously owned homes, particularly starter homes. That supply constraint helps limit price declines even as higher financing costs weaken affordability.On a monthly basis, prices fall in five regions, including New England and West South Central. They rise in the Mountain, East North Central, Middle Atlantic and West North Central regions.
Compared with a year earlier, prices increase 5.1% in the East North Central region. In the West South Central region, they decline 0.9%, showing that market conditions remain uneven across the country as borrowing costs climb.
We previously reported on oil prices rebounding after new U.S. strikes on targets in Iran, with Brent jumping as markets reassessed the risk of escalation. That earlier piece also noted that while negotiations and a possible reopening of the Strait of Hormuz were discussed, a quick deal was not guaranteed, keeping a geopolitical premium in crude prices.
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