Mortgage rates increasing again amid Iran war
Tracking the latest with war in Iran
Earlier this morning the Atomic Energy Organization of Iran reported that an airstrike has hit near one of its nuclear sites. Sinnan Ciddi with the Foundations for Defense & Democracies weighs in.
As the economic fallout from the war in Iran continues, one area Americans are noticing a difference is the housing market.
Here is the latest on mortgage rates in the U.S.:
Mortgage rates
The backstory:
The U.S. housing market has been in a sales slump since 2022, when mortgage rates began to increase from historic pandemic-era lows.
But that has been turning around for buyers, and as recently as the last week of 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.
Presently:
But since the end of February, rates have been rising again as the war in Iran began and continues.
By the numbers:
Mortgage rates climbed this week to 6.46%, its highest level in nearly seven months.
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Spring housing market
FILE - Single family homes in a residential neighborhood in San Marcos, Texas, US, on Tuesday, March 12, 2024. Photographer: Jordan Vonderhaar/Bloomberg via Getty Images
Big picture view:
While rates are still down, though, from a year ago, their recent upward trend has already led to a slowdown in mortgage applications, according to The Associated Press.
Further increases threaten to put a damper on home sales during what’s traditionally the busiest time of the year for the housing market.
What they're saying:
"The war in Iran has seriously complicated the spring buying season," said Joel Berner, senior economist at Realtor.com, told The Associated Press. "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."
Dig deeper:
Eugenio Alemán, the chief economist at the investment bank Raymond James, explained to the New York Times why the war in Iran could be driving up mortgage rates.
"As long as the conflict remains a threat to the price of petroleum, markets are going to continue to price higher inflation risks, which will translate into higher mortgage rates," he said.
Why you should care:
Higher mortgage rates mean higher monthly payments and could price buyers out of more homes.
For example:
On a $400,000 home near downtown Dallas, for example, factoring in a 20% down payment and a 30-year mortgage at 6%, the buyer’s monthly payment would be about $2,248. At a 6.4% rate, that payment would climb to $2,331.
RELATED: Trump: US military operations in Iran are 'nearing completion'
War in Iran
Trump: 48 hours before all Hell will reign down
President Trump is issuing a 48 Hour deadline to Iran to make a deal before all hell breaks loose. Here's what the president had to say via truth social: "Remember when I gave Iran ten days to MAKE A DEAL or OPEN UP THE HORMUZ STRAIT. Time is running out - 48 hours before all Hell will reign down on them. Glory be to GOD! President DONALD J. TRUMP"
Meanwhile:
Global oil supplies have been disrupted by the war in Iran, which began on Feb. 28 with a joint attack by the U.S. and Israel. The disruption has caused gas prices in the U.S. to soar.
Last week, the average cost for a gallon of regular gas in the U.S. topped $4, the highest since 2022.
The Source: Information in this article was taken from Freddie Mac, the New York Times and The Associated Press, who spoke to economists at various entities. Background information was taken from previous FOX Television Station reporting. This story was reported from Detroit.