Iran War Impacts Mortgage Rates for Spring Homebuyers/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Homebuyers are gaining negotiating power this spring as housing inventory rises. However, rising mortgage rates fueled by the Iran war are creating uncertainty. Higher borrowing costs threaten to slow home sales during peak buying season.

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Spring Housing Market 2026 — Quick Looks

• Mortgage rates rise due to Iran war
• Average 30-year mortgage climbs to 6.46%
• More homes available for buyers
• Sellers lowering prices and offering incentives
• Home prices declining in many major metros
• Buyers gaining leverage in negotiations
• Housing affordability still remains challenging
• Home sales sluggish compared to previous years
• Sellers facing longer time on market
• Spring buying season outlook uncertain

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Deep Look: Rising Mortgage Rates Cloud Buyer-Friendly Housing Market

LOS ANGELES — Homebuyers entering the spring housing season are finding more favorable conditions than last year, but rising mortgage rates fueled by the war in Iran are threatening to dampen momentum during what is typically the busiest time of the year for home sales.

Mortgage rates have climbed steadily since the conflict began, driven largely by surging energy prices and renewed inflation concerns. These developments have pushed yields higher on the 10-year U.S. Treasury bond, a key benchmark lenders use to set mortgage rates.

Just weeks ago, the average rate for a 30-year mortgage had dipped below 6%, its lowest level in more than three years. However, rates have since risen to 6.46%, marking the highest level in nearly seven months and raising concerns among prospective buyers.

Economists say the uncertainty surrounding the war is complicating the housing outlook.

“The war in Iran has seriously complicated the spring buying season,” said Joel Berner, senior economist at Realtor.com. Rising rates and economic uncertainty, he said, could cause many buyers to delay purchasing decisions.

Despite these headwinds, housing market conditions currently favor buyers in many parts of the country. Increased inventory and slower home sales are giving buyers more negotiating power than they’ve had in years.

Real estate agents report that sellers are increasingly willing to lower asking prices, offer repair credits, or cover closing costs to attract buyers. In some markets, homes are sitting unsold for weeks, further strengthening buyers’ leverage.

In the Dallas-Fort Worth area, for example, increased listings and declining prices have created a more competitive environment for sellers. Matthew Crites, a Coldwell Banker Realty agent, described the market as a strong opportunity for buyers.

“It’s been a really good buyer’s market to kind of start the year off with,” Crites said.

Anne King, a homebuyer in Fort Worth, recently took advantage of these conditions. She negotiated $10,000 off the asking price of a three-bedroom home and secured an additional $5,000 toward closing costs. After a home inspection revealed roof damage, the seller agreed to provide another $12,000 for repairs.

King finalized the purchase in late February, locking in a 6% mortgage rate before rates climbed further. She plans to refinance if rates fall in the future.

“I feel like I got a good deal on this property, and that’s all that matters,” she said.

Nationwide, housing inventory has increased modestly but remains below historical norms. Active listings rose nearly 8% in February compared to a year earlier, according to Realtor.com. In many major metropolitan areas, including Seattle, Las Vegas, Houston, and Denver, listings climbed significantly.

As homes take longer to sell, prices are beginning to decline in several markets. Median listing prices fell in more than half of the nation’s largest metro areas, including Austin, Memphis, Washington, D.C., San Diego, and Los Angeles.

Redfin data also suggests buyers are gaining the upper hand. In February, there were about 46% more sellers than buyers nationwide — the largest gap recorded since tracking began in 2013. Markets such as Miami, Nashville, and Austin showed particularly large imbalances.

Still, affordability remains a major challenge. The median price of an existing home sold in February reached $398,000, nearly five times the median household income. Historically, homes typically cost around three times household income.

Rising mortgage rates further complicate affordability. For example, on a $400,000 home with a 20% down payment, monthly payments increase significantly as rates rise. At 6%, the monthly payment is about $2,248. At 6.4%, it increases to roughly $2,331.

Although rates remain below last year’s levels, they are still far higher than the sub-3% mortgage rates common during the pandemic years of 2020 and 2021.

Sellers, meanwhile, are adjusting to a cooling market. Homes that once attracted multiple offers above asking price are now often sitting unsold.

Jo Chavez, a Redfin agent in Kansas City, advises sellers to price realistically and expect longer selling timelines.

Some homeowners are already feeling the pressure. Gail and David Sanders listed their four-bedroom home in Olathe, Kansas, in late February. Despite hosting open houses and lowering the asking price, they had not received any offers by late March.

The couple hopes to move closer to their children and grandchildren, but their plans remain on hold until their current home sells.

“I don’t want to be stuck with two house mortgages on the off chance,” Gail Sanders said.

As the spring homebuying season unfolds, buyers may find opportunities — but rising mortgage rates and economic uncertainty tied to global conflict could shape how the housing market performs in the months ahead.
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