Housing Market Favors Buyers, but Iran War Clouds Mortgage Rates

Surging energy prices from the Iran conflict drive up mortgage costs, even as other trends give home shoppers more leverage

Apr. 4, 2026 at 9:37pm

Got story updates? Submit your updates here. ›

The economic fallout from the war with Iran is driving up the cost of buying a home, even as other housing market trends in many parts of the country favor home shoppers this spring. Mortgage rates have been rising since the war began, as surging energy prices heighten worries about higher inflation, pushing up the yield on U.S. 10-year Treasury bonds, which lenders use as a guide to pricing home loans. However, home shoppers who can afford to buy at current mortgage rates this spring are likely to find a more buyer-friendly housing market than this time last year, with more homes on the market and lower listing prices in many areas.

Why it matters

The conflict in Iran is injecting more uncertainty into the U.S. economic outlook at a time when the job market is sputtering, which could put a damper on home sales during the traditionally busy spring buying season. While rates are still down from a year ago, their recent upward trend has already led to a slowdown in mortgage applications, and further increases threaten to put a damper on home sales.

The details

Mortgage rates have climbed from just under 6% in late February to 6.46% this week, their highest level in nearly seven months. The conflict is also driving up energy prices, heightening worries about higher inflation and pushing up the yield on U.S. 10-year Treasury bonds, which lenders use as a guide to pricing home loans. While the inventory of homes for sale nationally is still low by historical standards, active listings jumped nearly 8% in February from a year earlier, with the West, Midwest and South far outpacing the Northeast. As homes take longer to sell, prices have started falling, with the median listing price down in February from a year earlier in just over half of the nation's biggest 50 metro areas.

  • In late February, the average rate on a 30-year mortgage dropped to just under 6%, its lowest level in more than three and a half years.
  • This week, the average rate on a 30-year mortgage climbed to 6.46%, its highest level in nearly seven months.
  • In February, active listings jumped nearly 8% from a year earlier.

The players

Joel Berner

Senior economist at Realtor.com.

Matthew Crites

An agent with Coldwell Banker Realty in the Dallas-Fort Worth metro area.

Anne King

A 57-year-old contract administrator who recently purchased a home in Fort Worth, Texas.

Gail Sanders

A senior claims director who, along with her husband David, is trying to sell their home in Olathe, Kansas.

Jo Chavez

A Redfin agent in Kansas City who advises clients to be 'reasonable' with how they price their homes.

Got photos? Submit your photos here. ›

What they’re saying

“The war in Iran has seriously complicated the spring buying season. I expect that many buyers will be put off by rising rates and mounting economic uncertainty, choosing to bide their time rather than jumping on board for a purchase before rates go up.”

— Joel Berner, Senior economist

“It's been a really good buyer's market to kind of start the year off with.”

— Matthew Crites, Real estate agent

“Fortunately for me, the seller was in a position they needed to sell.”

— Anne King

“We just didn't think it was fair to somebody else to put a contingent offer on (another house), but then also lock ourselves into something when we weren't sure how fast ours was going to move. I don't want to be stuck with two house mortgages on the off chance.”

— Gail Sanders, Senior claims director

“We have a lot of sellers who have that idea of like, 'well, my neighbors sold for this much, and so I think I should price $10,000 above them.' And that's obviously not a logical approach, because there were less sales last year.”

— Jo Chavez, Real estate agent

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

The economic fallout from the war with Iran is driving up the cost of buying a home, even as other housing market trends in many parts of the country favor home shoppers this spring. While rates are still down from a year ago, their recent upward trend has already led to a slowdown in mortgage applications, and further increases threaten to put a damper on home sales during the traditionally busy spring buying season.