The housing market took a step back this week as rising interest rates continue to weigh on affordability. Mortgage demand dropped sharply, falling more than 10% as rates climbed to their highest levels since October. The increase in rates has been driven less by Fed policy and more by rising Treasury yields, which are reacting to renewed inflation concerns—particularly tied to energy prices. For buyers, this creates a familiar challenge: higher borrowing costs and less purchasing power just as the spring housing season begins. It’s another reminder that while progress has been made, the housing market remains very sensitive to even small moves in interest rates.
Outside of housing, Washington added another layer of uncertainty this week as the partial government shutdown tied to the Department of Homeland Security drags on. The situation has started to show real-world impacts, particularly on travel, where TSA staffing shortages have led to longer waiting times at airports. While markets have largely taken political noise in stride, prolonged dysfunction like this can begin to weigh on consumer confidence and day-to-day economic activity if it drags on. As of this writing, there is a strong possibility these issues may be resolved in the next 24/48 hours. The Senate has passed a bill that now sits in the House for a vote.
The biggest development driving markets right now, however, is the ongoing conflict involving Iran and its impact on energy prices. Oil has surged higher as concerns around supply disruptions in the Middle East continue to build. Given the importance of key shipping routes in the region, even the threat of disruption has been enough to push prices upward and keep markets on edge.
That move in oil is starting to ripple through the broader economy. Higher energy costs are putting upward pressure on inflation expectations, which in turn is pushing bond yields higher and keeping mortgage rates elevated. Markets have also shown signs of increased volatility as investors reassess how long interest rates may need to stay higher. While none of this points to a breakdown in the economy, it does reinforce the current environment—one where progress on inflation is being tested by external shocks, and where both the Fed and markets remain firmly in a wait-and-see mode.
Interesting to Note
We’re right in the middle of cherry blossom season in Washington, D.C., with peak blooming now. It’s a good reminder that even with everything going on in markets and the world, spring still shows up right on schedule.
See a live view HERE:
https://nationalcherryblossomfestival.org/bloom-watch
Looking Ahead
- Jobs Report (Friday): The March employment report will be the key focus, with markets watching closely for signs that the labor market continues to cool.
- Job Openings (Tuesday): Another look at labor demand and whether hiring appetite is starting to slow or hold steady.
- Consumer Confidence (Tuesday): A pulse check on how consumers are feeling amid higher gas prices and ongoing uncertainty.
- Manufacturing Data (PMI): Early signals on business activity and whether higher input costs are starting to weigh on growth.
While the world around us continues to generate near-term headlines, our focus remains on the longer-term outlook and how that shapes your personal wellbeing. Have a nice weekend!
https://www.cnbc.com/2026/03/25/mortgage-demand-drops-highest-level-since-october.html?__source=iosappshare%7Ccom.apple.UIKit.activity.Mail
https://www.cnbc.com/2026/03/27/dhs-tsa-shutdown-congress.html?__source=iosappshare%7Ccom.apple.UIKit.activity.M
https://www.reuters.com/world/iran/?gad_source=1&gad_campaignid=22314562799&gbraid=0AAAAA-mwunEX7zp662UtgQFjypcCGNLtW&gclid=Cj0KCQjw1ZjOBhCmARIsADDuFTDW0aR-vk7zC0Xpw05QNwCguUOBuIbX3GvbjYysrxySmA3P_9pP9aUaAp2yEALw_wcB
https://www.cnbc.com/2026/03/27/dhs-tsa-shutdown-congress.html
Looking for an informative discussion on the still-unfolding events in the Middle East?
Join Kara Murphy, President and Chief Investment Officer of Kestra Investment Management and Ryan Bohl, Senior Middle East & North Africa Analyst, RANE Network, as they discuss what the conflict in Iran means for global geopolitics, energy-driven inflation risks and markets.
- Is there a clear off ramp to this conflict?
- What does success look like for the US?
- Are oil prices likely to remain higher for longer?
- What longer-term trends – ie, oil markets, political alliances – will this conflict likely accelerate?
RANE is a global risk intelligence company that helps organizations anticipate, assess, and manage geopolitical, security, and operational risks through expert analysis, forecasting, and advisory services.
Date: Monday, March 30
Time: 1:00 p.m. CT | 2:00 p.m. ET
Use this link to REGISTER NOW!
Christopher E. Wasson, CFP®
President
Mosaic Asset Partners, LLC
1122 Kenilworth Drive, Suite 310
Towson, MD 21204
410.821.0089 fax 410.821.5993
MosaicAssetPartners.com
Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Mosaic Asset Partners, LLC is not affiliated with Kestra IS or Kestra AS. Investor Disclosures: https://www.kestrafinancial.com/disclosures
The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra IS or Kestra AS. The material is for informational purposes only. It represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. It is not guaranteed by Kestra IS or Kestra AS for accuracy, does not purport to be complete and is not intended to be used as a primary basis for investment decisions. It should also not be construed as advice meeting the particular investment needs of any investor. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.
