The Housing Market's Whiplash Week
Mortgage rates hit a 4-year low in early March, triggering an 11% weekly surge in demand and a refinancing frenzy — then Iran war turmoil sent rates spiking back up within days, creating the biggest upheaval in UK mortgage markets since the 2022 mini-Budget. In the US, existing home sales unexpectedly rose 1.7% to a 4.09 million annualized rate in February, according to National Association of Realtors data, but the brief rate relief may have already ended before spring's peak selling season begins.
The Missing Generation of Buyers
The rate volatility comes as Realtor.com found nearly 2 million Millennials and Gen Z buyers have effectively disappeared from the housing market in 2025, trapped in what analysts call "suspended adulthood." Frustrated sellers are re-listing homes at the fastest pace in a decade after pulling them last fall, but supply remains stubbornly low. The typical homeowner has stayed put for 12 years as of December — nearly double the median tenure of two decades ago, according to Redfin data discussed by Jim Egan, Morgan Stanley's US housing strategist.
What Traders Are Watching
The mortgage rate chaos reflects broader market turbulence. 'JUST IN: Our traders forecast gas prices to rise to $4.10 this month' — @Kalshi tweeted, as AAA reported prices already hit $3.60 per gallon and climbing. Rising oil prices drove mortgage rates higher last week, cooling the refinancing boom. Halifax warned that "geopolitical uncertainties" from the Iran conflict could slow the expected decline in mortgage rates throughout 2026, as the war affects global economies and stokes inflation. UK lenders including Nationwide, HSBC, and Coventry Building Society have already raised rates, with average UK mortgage rates hitting their highest level since August.
The Institutional Exodus Accelerates
Big investors have been fleeing the for-sale housing market even before Trump ordered a ban on institutional purchases of single-family rentals, deterred by high home prices that have made returns less attractive. Brookfield Residential CFO Thomas Lui said the US economy "is quite resilient and continues to be," but added that "working through the volatility" and achieving "stabilization" will be key to rebuilding consumer confidence. 'JUST IN: Trump demands "immediate" rate cuts' — @Kalshi reported, though traders give it only a 1% chance of happening. With the US Treasury executing its largest weekly buyback ever at $19 billion, the mortgage market faces conflicting signals: improving affordability metrics versus renewed geopolitical shocks that could keep rates elevated through spring.
