This Market Update is written by our Capital Market specialists each week to bring you insight into what's happening in the market and how it may affect mortgage rates and real estate trends.
Market Commentary:
From March 20th to March 26th, interest rates centered on the Federal Reserve holding rates steady at 3.50% - 3.75%, emphasizing uncertainty from the Iran conflict and sticky inflation. Across all major reports, policymakers signaled caution, minimal forecast changes, and no immediate shift toward rate cuts. Decision aligned with market expectations, with CME FedWatch showing 90% plus probability of no change before the meeting.
Inflation remains above target, with oil‑driven price pressures a near‑term risk. Labor market indicators show low job gains but overall economic resilience. GDP forecasts were revised slightly upward for2026 to 2028, reflecting moderate economic strength. Dot plot signals one to two rate cuts ahead, but timing remains uncertain and dependent on inflation progress.
FedWatch: Target rate (in bps) possibilities, according to the CME Group (as of 03/26/2026 – 12:00 PM EST):
Age of Housing Stock by State:
Almost Half of the Owner-Occupied Homes Built Before 1980
Building ‘Boutface:
In 12/25, construction spending on data centers at $3.57b and at $45.1b seasonally adjusted and annualized, topped construction spending on office buildings at $3.49b and $43.5b SAA for the first time. As recently as 20Q1,office building spending was 7x data center spending. Unrelatedly but similarly, CY2025 was the first time service-oriented tenants (think Botox clinics) leased more than 50% of all retail space leased, surpassing goods-based retail (think Macy’s). - Elliot Eisenberg, Economist
News You Can Use:
· How the Iran war could crush the US housing recovery, and it's not just about mortgage rates
· Housing Affordability Improves Nearly 10% In 2025 As Rates And Incomes Align – NMP
· U.S. Housing Market Uniquely “Handcuffed” By Mortgage Structure – NMP
· Build-to-rent, co-living, and mortgage rates: Shaping the 2026 housing market
· 1 in 5 Sellers in Multiple Markets Is Slashing Prices
· $500 Billion Wellness Industry Starts Working Out With Housing
· Builders’ blueprint to tackle the US housing crisis
*Communication is intended for Industry Professionals only and not intended for Consumer Distribution
Interest rate and annual percentage rate (APR) are based on current market conditions as of 03/26/2026, are for informational purposes only, are subject to change without notice and may be subject to pricing add-ons related to property type, loan amount, loan-to-value, credit score and other variables. Estimated closing costs used in the APR calculation are assumed to be paid by the borrower at closing. If the closing costs are financed, the loan, APR and payment amounts will be higher. Contact us for details. Additional loan programs may be available. Accuracy is not guaranteed, and all products may not be available in all borrower's geographical areas and are based on their individual situation. This is not a credit decision or a commitment to lend. Actual interest rate, APR, and payment may vary based on the specific terms of the loan selected, verification of information, your credit history, the location and type of property, and other factors as determined by Prosperity Home Mortgage, LLC. Not available in all states. Rate is as of 03/26/2026 and is subject to change at any time without notice. Opinions, estimates, forecasts, and other views contained in this document are those of Freddie Mac’s economists and other researchers, do not necessarily represent the views of Freddie Mac or its management, and should not be construed as indicating Freddie Mac’s business prospects or expected results. Although the authors attempt to provide reliable, useful information, they do not guarantee that the information or other content in this document is accurate, current, or suitable for any particular purpose. All content is subject to change without notice. All content is provided on an “as is” basis, with no warranties of any kind whatsoever. Information from this document may be used with proper attribution.
