During my years of reporting on mortgage rates and the housing market (and other personal finance topics), I’ve found that real estate trends can be difficult to predict.
This is especially the case when global economic events become unexpectedly volatile, such as the current developments in Iran and the closure of the Strait of Hormuz.
With those dynamics already driving up oil prices and impacting the overall economy, the March inflation report on April 10 revealed that the Consumer Price Index (CPI) rose 0.9% seasonally adjusted and increased 3.3% over the last 12 months, not seasonally adjusted, according to the U.S. Bureau of Labor Statistics.
Real estate technology company Redfin took the opportunity to make a prediction about how that report might affect mortgage rates.
“Gas prices surged 21% and fuel oil 31% in the March inflation data,” wrote Redfin head of economics research Chen Zhao. “These spikes were forecasted accurately by market observers ahead of time and the implications have been priced in by bond markets these past six weeks, so there is little market reaction to this data.”
“Headline inflation, which includes food and energy prices, spiked in March, but [mortgage] rates won’t move much today because core inflation, which ignores those volatile components, remained subdued,” Redfin wrote.
That forecast appears to have been largely accurate, as the national average on a 30-year fixed-rate mortgage ended April 10 at 6.41%, modestly lower than the previous day when it was 6.44%.
Then, on April 13, the average 30-year fixed rate inched slightly lower, to 6.39%, according to Mortgage News Daily (MND).
“From 5.99% in late February, [mortgage] rates spiked as high as 6.64% on March 27th,” MND wrote. “They’ve fallen noticeably but moderately since then, but the recent trajectory has been flattening out as the market waits to see how de-escalation may play out.”
Zillow reports on housing market boost
Meanwhile, real estate technology company Zillow released its March Market Report, finding that the housing market accelerated, despite the mortgage rate increase.
“Pent-up demand from three years of low sales volume and winter storms in January and February, along with the tailwind from lower mortgage rates earlier in the year, seem to have buoyed the market as home shopping season kicked off,” Zillow wrote.
“Housing market activity sprang forward in March, even as rising mortgage rates began to chip away at earlier affordability gains,” the company added.
But concerns about March’s jump in energy costs added another layer of uncertainty for would‑be buyers still navigating the post‑pandemic market, Zillow explained.
Mortgage rates moved from 5.98% at the end of February to 6.38% by late March, according to Freddie Mac, erasing part of the affordability boost that had lifted early‑year sentiment.
The typical monthly payment rose 1.5% from February, before taxes and insurance, tightening budgets just as confidence had begun to improve.
“Even so, demand held firm, with average daily page views per for-sale listing on Zillow 32% higher than last March,” Zillow wrote. “This demand signal outpacing inventory growth is showing the first signs of improvement since the pandemic ended.”
Zillow outlines key March housing market data
Newly pending listings, home values and inventory also saw gains in March, Zillow found.
- There were 281,546 newly pending listings in March, and only May 2025 recorded a higher count since August 2022.
- The 4.6% year‑over‑year increase in newly pending listings was the strongest March gain seen in the past five years.
- The 29.8% month‑over‑month jump in newly pending listings also marked the largest March increase over that same five‑year period.
- Home values rose 0.8% from a year earlier, reflecting a modest acceleration from February’s 0.4% annual growth rate.
- Inventory increased on a yearly basis for the 28th month in a row.
- New listings were essentially unchanged from a year earlier, rising 0.1%.
- That slight annual uptick in new listings represented an improvement from January and February, when new‑listing activity trailed prior‑year levels.
(Source:Zillow)
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Redfin predicts inflation report impact on interest rates
Federal Reserve policymakers focus primarily on core inflation — which excludes food and energy — because those underlying categories are the ones that typically respond to interest‑rate moves, Redfin explained.
Core prices rose 0.2% in March, or 2.6% over the past year, coming in a touch softer than expected. A sharp 1.0% monthly drop in prescription drug prices and a 1.5% decline in over‑the‑counter medications contributed to that weakness.
“Overall, there is little evidence of the energy price spike affecting other categories yet,” Redfin wrote. “However, airline fares, an especially energy-sensitive sector, jumped 2.7% monthly. There is also some evidence of continued tariff rollback, with household goods prices soft.”
“There’s been some fear among investors that the Fed may have to hike rates this year, which this report should help to alleviate,” Redfin added.
“Overall, similar to the recent jobs reports, today’s data along with the volatility in the Middle East, point to the Fed holding steady for a while.”
Related: Zillow forecasts mortgage rate, housing market shift
