Cowen's Corner-Mortgage Market Update: March Memories and a Shift in the Market

March 23, 2026
Good Morning from Casa de Cowen. It felt good to be home for a Friday baseball game and I got a little nostalgic about this time of year. I am about to date myself, but bear with me. My wife and I started dating in the fall of 1997. The MCI Center, now Capital One Arena, had just opened and that spring, spring of 1998, the first round of March Madness was held there. A few, or maybe more than a few, of my college buddies and I got tickets. This region played Thursday and Saturday.
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So naturally, the festivities started Wednesday. That is how we rolled back then.

Thursday was a full day in DC. Eight of us piled into a cab back to McLean that night. Friday, we headed to Champs, a huge sports bar in Reston at the time, before going back downtown for Saturday’s games.

Two quick stories. First, Friday night one of my buddies was overserved and somehow mistook Heath Shuler, former first-round quarterback for Washington, for one of our fraternity brothers from Radford. How that happens, I have no idea. That may have been the beginning of the end for Shuler.

Second, this was my first true Irish goodbye. My wife, then my girlfriend, lived on Capitol Hill. During the second game on Saturday, I had enough. I told the guys I was heading to the bathroom, borrowed a quarter in the hallway, called Cindy from a payphone, and had her come pick me up. No cell phones back then, just payphones.

I still remember her pulling up, looking at me, and saying, “oh my.” You have to start somewhere in a relationship.

Market Notes

It was a really tough week for mortgage rates.

Given the geopolitical backdrop, it feels like a regime shift is underway. Since May of 2025, mortgage rates had shown relatively stable improvement. Economic data was steady, inflation pressures were gradually easing, and long-term rates were trending lower.

That changed this past week.

The conflict involving Iran accelerated late in the week and shifted market expectations. Inflation remains too high for the Fed to continue cutting short-term rates. Oil and energy prices are rising meaningfully. Central banks are no longer expected to cut rates anytime soon. On top of that, there is growing concern that the Treasury will need to issue more bonds to cover increased costs, adding supply to the market.

That is not a great combination for mortgage rates.

Looking Ahead*

So where does that leave us?

Uncertainty is not good for mortgage rates. Having seen multiple cycles over my career, I can say that once we get some clarity around the current conflict, the market should begin to stabilize.

Until then, we work with what we have. Paying points to buy down a rate may make more sense today than it did a month ago, and some ARM programs can provide short-term relief.

I will be around all week and happy to assist with any mortgage related questions or needs.

-Steve-

*All loans are subject to credit approval and program guidelines.

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About the Company

Potomac Bank, Inc., a wholly owned subsidiary of Potomac Bancshares, Inc., was founded in 1871 as Bank of Charles Town and renamed Potomac Bank on November 3, 2025. The Company’s total assets were $976 million as of March 31, 2026. The Bank conducts operations through its nine-branch network and one loan production office serving the Eastern Panhandle of West Virginia, Washington County, Maryland, and Northern Virginia. The Bank offers comprehensive financial solutions through its consumer and commercial banking divisions, Trust, Wealth, and BCT Investments divisions, and its Residential Lending mortgage division. The Bank is also proud to serve its communities as a Small Business Administration (SBA) Preferred Lender. Over the past several years, the Bank has received numerous awards and recognitions, including American Banker’s “Top 200 Community Banks” and “Best Banks to Work For”, the Journal-News “Best of the Best” award, and the LoudounNow “Loudoun’s Favorite” award. 

The Company's shares are quoted on the OTCID marketplace under the symbol "PTBS." For more information about the Bank, please visit our website at www.potomac.bank.

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