New Veros forecast showed only modest price gains as oil and rates stayed elevated
The spring housing market has been edging toward a thaw. After years of restrictive borrowing costs and thin inventory, mortgage rates briefly dipped below 6% in late February and purchase activity began to stir. Then the war in Iran pushed oil sharply higher, reigniting inflation fears and sending long‑term rates back up just as buyers tested the waters again.
In that context, Veros Real Estate Solutions’ latest VeroFORECAST pointed to only a “modest national appreciation of 1.3%” over the next 12 months, even as it covered 323 metropolitan areas and more than 80% of the US population.
The report described how “buyers were slowly re‑entering” the market before geopolitics intervened and “sent oil prices sharply higher, reigniting concerns about inflation just as it appeared to be cooling.”
Veros noted that after rates slipped below 6% in late February, “the average 30‑year fixed rate mortgage climbed back to roughly 6.4% by late March,” a move it said carried “outsized consequences” for stretched households.
Freddie Mac reported its benchmark 30‑year fixed‑rate mortgage averaged 6.46% as of April 2. That's up from 6.38% a week earlier and 6.64% a year ago.
Oil, Iran and the rate backdrop
Veros said rising oil fed into “transportation, goods, and services costs across the economy,” keeping “upward pressure on interest rates” and limiting how far mortgage rates could fall.
At the same time, “the labor market [was] beginning to show weakness” even as unemployment stayed in the “mid‑4% range,” the report said, noting that housing decisions were tied closely to confidence in income and job security.
Those concerns echo recent industry commentary. In an interview with Mortgage Professional America, First American senior economist Sam Williamson said “the bigger issue [was] not the initial oil spike, but whether higher energy prices [became] embedded in the broader inflation outlook.”
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Top markets clustered in Northeast, Midwest and Silicon Valley
“The strongest‑performing markets include Reading, PA; Rochester, NY; Springfield, MA; Allentown‑Bethlehem‑Easton, PA‑NJ; Rockford, IL; Hartford, CT; Racine, WI; Syracuse, NY; and Manchester, NH, alongside San Jose, CA, which stands out due to its exposure to the tech sector,” Veros said.
Reading led with a 4.2% gain, followed by San Jose–Sunnyvale–Santa Clara at 4.1%; Rochester and Springfield at 4.0%; Allentown–Bethlehem–Easton at 3.9%; Rockford and Hartford at 3.8%; Racine and Syracuse at 3.7%; and Manchester–Nashua at 3.6%.
Sun Belt boomtowns turned soft spots
By contrast, Veros said “several Sun Belt markets that saw rapid growth during the pandemic [were] now facing headwinds.”
Cape Coral–Fort Myers, Fla. (‑2.7%), Naples–Marco Island, Fla. (‑1.7%), Austin–Round Rock–San Marcos, Texas (‑1.4%), Panama City–Panama City Beach, Fla. (‑1.1%) and Pueblo, Colo. (‑1.1%) were among the weakest markets.
They were joined by Corpus Christi, Sherman–Denison and Lake Charles (all ‑1.0%), Urban Honolulu (‑0.9%) and North Port–Bradenton–Sarasota (‑0.8%).
Veros attributed the drag to a combination of elevated home prices, rising insurance costs, and a surge in new construction, factors that weighed on demand and intensified competition among sellers.
On the supply side, conditions were more complicated than headline inventory figures suggested. Listings began to rise, but not because of a wave of new sellers; instead, homes took longer to sell and listings sat on the market while many owners remained locked in place.
Buyers also became more cautious. They waited, reran their numbers, and in many cases chose to delay purchases.
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