Spring Housing Market Gains Momentum Even as Mortgage Rates Rise, Zillow Says

The spring housing market opened with more energy than many expected in March. Zillow reported that newly pending home sales rose 4.6% year over year and nearly 30% from February, even as the average 30-year fixed mortgage rate climbed to 6.38% in late March. Inventory kept improving, home values posted modest annual growth, and buyer demand remained resilient despite fresh affordability pressure.

The U.S. housing market showed fresh signs of life in March, offering an early signal that the 2026 spring buying season may be stronger than many mortgage and real estate professionals anticipated. According to Zillow’s March Market Report, buyer activity accelerated even as mortgage rates moved higher late in the month, cutting into some of the affordability gains that had helped lift sentiment earlier this year.

Zillow said newly pending listings rose to 281,546 in March, up 4.6% from a year ago and 29.8% from February. That made March the second-highest month for newly pending listings since August 2022, trailing only May 2025. For a market that has spent years dealing with low sales volume, stubborn affordability problems, and hesitant sellers, that is a meaningful shift.

The report’s central takeaway is clear: buyers are still moving when inventory improves, even when rates do not cooperate. Freddie Mac’s Primary Mortgage Market Survey showed the average 30-year fixed-rate mortgage rose from 5.98% at the end of February to 6.38% by late March. Zillow said that rate move pushed the typical monthly mortgage payment on a standard U.S. home up 1.5% from February, excluding taxes and insurance.

Even with that affordability setback, demand stayed firm. Zillow reported that average daily page views per for-sale listing were 32% higher than a year earlier, suggesting that shopper interest outpaced the growth in available supply. That matters because one of the market’s biggest recent problems has not been a lack of curiosity from buyers, but a lack of enough inventory at price points people can still chase.

What the March data showed

Here is the snapshot from Zillow’s March report:

Those figures paint a market that is not overheated, but is no longer stuck. Home values rose 0.8% from a year earlier, a slight acceleration from February’s 0.4% annual growth. Inventory increased on an annual basis for the 28th straight month, while new listings were essentially flat year over year, up just 0.1%, but much stronger than in January and February when seller activity lagged prior-year levels.

Why this matters for mortgage lenders

For lenders, the report suggests that purchase business is still there for originators who can capture it. This is not a refinance-driven story. It is a purchase market story built on pent-up demand, modestly better inventory conditions, and buyers who appear increasingly willing to transact when the right home becomes available.

That creates an important operating environment for loan officers and mortgage companies. When rates rise but purchase activity still improves, borrowers tend to become more payment-sensitive, more comparison-oriented, and more dependent on advice. In a market like this, product mix, pre-approval speed, lock strategy, and borrower education all become more important. That is especially true when monthly payment changes are being driven by rate volatility rather than large moves in home prices. The inference here is based on Zillow’s reported payment pressure and sustained buyer engagement.

Inventory is improving, but not enough to erase affordability pressure

Inventory gains remain one of the most constructive parts of the March report. Zillow said there were 1.23 million homes for sale nationwide in March, up 4.2% from a year earlier and 9.5% from February. That continued improvement gives buyers more options than they had in much of the post-pandemic market.

Still, more inventory does not automatically mean easy affordability. The typical U.S. home value reached $365,545, and Zillow estimated the monthly mortgage payment on that home at $1,789 with a 20% down payment, excluding taxes and insurance. That payment was still 4.4% lower than a year earlier, but the March rate jump shows how quickly progress can be interrupted.

This is the tension likely to define the near-term housing market: supply conditions are getting better, but affordability remains fragile. Buyers may have more homes to choose from, yet their budgets can still tighten quickly when rates swing higher over just a few weeks.

Competition is changing, not disappearing

The March data also showed a market that remains competitive, but in a more normalized way than during the pandemic-era frenzy. Homes took a median of 19 days to go pending in March, which was nine days faster than February but two days slower than a year earlier. At the same time, 22.6% of listings had a price cut, down 0.8 percentage points from last year but up 2.4 percentage points from February.

That combination suggests buyers are active, but not blindly aggressive. Homes are moving faster as spring arrives, yet sellers still need to price carefully. For mortgage professionals, this kind of market often produces more realistic negotiations, fewer panic bids, and more opportunities to help buyers structure winning offers without stretching beyond payment comfort. That final point is an interpretation of Zillow’s competition and pricing data.

Zillow’s economist sees a market turning a corner

Zillow Chief Economist Mischa Fisher said the market is showing “persistent signals” that it has turned a corner. The company pointed to pent-up demand after roughly three years of low sales volume, weather disruptions earlier in the year, and the support that came from lower mortgage rates before March’s late-month spike. Zillow also highlighted the sharp increase in page views per listing as one of the clearest signs that the market is waking up.

That does not mean the path ahead is smooth. Zillow also noted that buyers and sellers are still dealing with economic uncertainty and market volatility. But March delivered evidence that housing demand has not disappeared. It has simply been waiting for better conditions, even if those conditions arrive unevenly.

What homeowners, buyers, and the mortgage industry should watch next

The next phase of the spring market may come down to one question: can demand stay strong if mortgage rates remain in the mid-6% range or move higher? Freddie Mac’s survey showed the 30-year fixed rate averaged 6.46% on April 2 before easing slightly to 6.37% on April 9, underscoring how quickly borrowing costs can move week to week.

If rates stabilize, March’s momentum could carry deeper into the spring. If rates resume climbing, the market may still produce sales growth, but likely with a narrower pool of buyers who can absorb higher monthly payments. Either way, March showed that inventory gains and pent-up demand are giving the housing market a stronger base than it had in recent years. That forward-looking assessment is an inference grounded in Zillow’s March data and Freddie Mac’s rate trend.

FAQ

Did the housing market improve in March 2026?
Yes. Zillow reported that newly pending listings rose 4.6% year over year and 29.8% from February, indicating stronger buyer activity as the spring season began.

Did mortgage rates rise in March 2026?
Yes. Freddie Mac data cited by Zillow showed the average 30-year fixed mortgage rate increased from 5.98% at the end of February to 6.38% in late March.

Are home prices still rising?
Yes, but modestly. Zillow said home values were up 0.8% from a year earlier in March.

Is inventory getting better?
Yes. Zillow reported 1.23 million homes for sale in March, with active inventory up 4.2% from a year earlier and 9.5% from February.

What does this mean for mortgage lenders?
It points to a purchase-focused market where demand still exists, but borrowers are highly sensitive to rates and monthly payment changes. That conclusion is an interpretation based on Zillow’s sales, traffic, and payment data.

Bottom line

March did not deliver a perfect housing market. Rates rose, affordability worsened at the margin, and sellers still were not flooding the market with fresh supply. But it did deliver something the mortgage industry has been waiting for: credible evidence that buyers are re-engaging. Pending sales picked up, inventory kept climbing, and online shopping traffic surged. For lenders, brokers, real estate agents, and homebuyers, that makes March one of the clearest signs yet that the 2026 spring market has real momentum.

Sources: Zillow March Market Report via Zillow Research and PR Newswire; Freddie Mac Primary Mortgage Market Survey.