Weekly Mortgage & Market Update

Energy Prices Push Inflation Higher

Week of April 6, 2026 in Review

Inflation Jumps on Higher Energy Costs

March inflation moved higher, driven largely by energy price spikes. The latest Consumer Price Index (CPI) showed prices rose 0.9% for the month and 3.3% year over year, a sharp increase from 2.4%, with higher fuel and gasoline prices tied to the Iran conflict playing a major role. Core inflation, which excludes food and energy, remained more moderate, rising 0.2% for the month and 2.6% annually. February’s Personal Consumption Expenditures (PCE) index—the Federal Reserve’s preferred inflation measure—also showed broad-based price increases, which was somewhat surprising since it reflects data from before the March oil spike.

The bigger picture is that the Fed is balancing two competing trends: inflation that remains above target and signs that the labor market may be slowing. Sticky inflation supports a cautious approach to rate cuts, while softer employment data could strengthen the case for easing later this year. The Fed has held its benchmark rate steady so far this year after cutting three times late last year, and while that rate doesn’t directly set mortgage rates, it does influence overall borrowing costs. March meeting minutes showed that more officials—though still a minority—are open to the possibility of rate hikes if inflation remains elevated, reflecting ongoing concerns about geopolitical tensions and rising energy prices. For now, the Fed remains in a wait-and-see mode.

Forecast Signals Opportunity for Homebuyers

On the housing front, home prices remained stable from January to February and are up 0.5% compared to this time last year. Looking ahead, Cotality projects home prices will climb about 4.7% over the next year, an increase from their previous 4.4% forecast. This reinforces a key point: real estate tends to build wealth over time. For example, a $500,000 home gaining 5% in value would add roughly $25,000 in a year, showing how steady appreciation can make a meaningful impact.

Economic Snapshot: GDP and Unemployment

The final reading for Q4 2025 GDP shows the U.S. economy grew at an annualized rate of just 0.5%, a sharp slowdown from 4.4% in Q3 and slightly below the previous estimate of 0.7%, with much of the decline tied to reduced government spending during the shutdown. On the labor side, new unemployment claims increased by 16,000 to 219,000, although this figure may understate the full impact as some displaced workers are turning to gig or freelance work instead of filing for benefits. Meanwhile, continuing claims dropped by 38,000 to 1.794 million. While that’s a modest improvement, the overall level remains elevated, suggesting many job seekers are still taking longer to secure employment, and part of the decline may also be due to benefits expiring.

What to Look for This Week

Housing data will be in focus, with March’s Existing Home Sales on Monday and homebuilder confidence on Wednesday. More inflation data is also ahead, as Tuesday’s Producer Price Index will provide fresh insight into wholesale prices, followed by the latest jobless claims on Thursday.

Technical Picture

Mortgage Bonds ended last week testing a key support level at their 200-day Moving Average. If that level does not hold, bonds could move lower toward the next support zone around the 100.61 Fibonacci level and the 25-day Moving Average. At the same time, the 10-year Treasury yield moved back above its 25-day Moving Average and ended the week just below an important ceiling near 4.332%. Looking ahead, market movement will likely be driven by developments surrounding talks between the U.S., Iran, and Israel.

Home Life Tip of the Week

National Pecan Day is April 14, and it’s a great excuse to make simple maple pecan cookies. Preheat your oven to 375 degrees and line two baking sheets with parchment paper. Cream together one stick of unsalted butter and three-quarters of a cup of dark brown sugar until light and fluffy, then slowly mix in half a cup of maple syrup. Add one egg and a teaspoon of vanilla, then stir in one and three-quarter cups of flour, one and three-quarter teaspoons of baking powder, and three-quarters of a teaspoon of salt. Fold in one and a half cups of finely chopped pecans, scoop about two tablespoons of dough per cookie, and space them about an inch and a half apart. Lightly sprinkle with flaky sea salt and bake for 15 to 18 minutes until the edges are golden, then let them cool before serving.

Source: MBSHighway