Has the Conflict With Iran Impacted the Housing Market?

With the spring housing market in full swing and the ongoing war in Iran, news sources have providing a variety of analysis on how angles on the US housing situation.

Current Rates: The current 30-year fixed-rate mortgage, according to Mortgage News Daily, is around 6.48%, which is up from 5.99% in late February. However, this rate dropped from a peak of 7.26% in January of 2025.

Wartime Mortgage Rates: Axios (Lean Left bias) pointed to the war in Iran as the cause for "mortgage rates hitting their highest point in five months." The article said that the war in Iran "has triggered energy inflation that's dimming the prospects of interest rate cuts and keeping borrowing costs higher." Axios explained that "mortgage rates are priced off the 10-year Treasury yield," and "the threat of higher-for-longer oil prices continued to keep Treasury yields elevated."

Not Just Mortgage Rates: CNBC (Lean Left) said, "the Iran war could crush the U.S. housing recovery, and it's not just about mortgage rates." The article cited Zillow's chief economist Mischa Fisher, who explained that on top of the increased mortgage rates, there is "potential for a slight uptick in the unemployment rate given reduced consumer spending power resulting from higher prices."

Location, Location, Location: Fortune (Center) focused on a trend showing "Gen Zers are flocking" to the Midwest, where homes are on average about 30% cheaper than major coastal metros like New York City or Los Angeles. The article cited information from Redfin showing that "although home prices in the Midwest are rising," locations like Detroit, Michigan, "has the lowest median sales price of any major metro at $80,000," and Cleveland, Ohio, "at about $125,500," both of which "are less than half of the overall U.S. figure."

Buyer's Market: Newsweek (Center) highlighted Redfin data showing that the US housing market last month had "630,000 more sellers than buyers," which marked "the largest gap in records dating back to 2013." The article explained that anytime the market has ten percent more sellers than buyers, it is considered a buyer's market. Last month, there were an estimated 46 percent more sellers than buyers, saying the figures indicate "that the United States is solidly a buyer's market." However, under the ten percent definition, the US has been a "buyer's market since May 2024—without bringing much relief to U.S. buyers."

Frozen Market: ZeroHedge (Lean Right) said that the increased mortgage rates, coupled with insurance, "turns a half-million dollar house into a $1.2 million house plus property taxes," making houses "unaffordable for another class of buyers while already out of reach for most people." The article also mentioned that on the supply side of the equation, "millions of existing homeowners are locked into COVID-era mortgages of 3 percent or lower," which is "a great deal unless you sell and then have to buy again." The article explained that this has produced an 18 percent drop in home sale numbers in January, which is "a level comparable to the bust following the 2008 financial crisis that began with housing."      

Written by the AllSides staff (of humans). Learn more. Support our mission. Suggest an improvement to this summary.