Could Iran Chaos Lead to Mortgage Rates Going ⬇️ or ⬆️?

We are officially 18 days from Spring!

I could feel that seasonal depression melt away this week as the snow finally disappeared! Just like the warmer weather, we are starting to see the housing market heat up! It's been a crazy week in the economic world.

Let's breakdown the latest and greatest!

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Read time: ~5 minutes

Rates ended LOWER compared to last week, and volatility was HIGH. Rates are in the high 5% range for most loan types without paying discount points. Paying discount points can get you in the mid/high 5's.

Could Iran Chaos Lead to Mortgage Rates Going ⬇️ or ⬆️?

Have you ever noticed how this administration seems to leave the chaotic global events for late Friday night or over a weekend? Let's look back at the past year and how Trump's weekend of chaos has affected markets:

• June 22, 2025 (Sunday) — The U.S. bombed Iranian nuclear facilities as part of what was called Operation Midnight Hammer. The following week, mortgage rates dropped about 0.25%.

• January 3, 2026 (Saturday) — U.S. forces captured Venezuelan leader Nicolás Maduro. Rates dropped roughly 0.25% the next week.

• February 28, 2026 (Friday) — The U.S. and Israel launched coordinated strikes on Iranian military targets. We're watching how rates respond....

Clearly, there's a pattern where markets react after a weekend of chaos. It's our responsibly to provide insight to our clients on how this affects our local real estate and mortgage world. So let's try and break this down in laymen terms...

In times of international fighting, investors often pull money out of riskier assets like stocks and shift it into safe havens such as long-term government bonds. When money flows into safe long-term bonds, mortgage rates get pushed lower as you can see above with past conflicts.

However, this time may be different as there is a big wildcard...oil. The latest strikes have raised serious concerns about disruptions in the Strait of Hormuz, the narrow waterway through which about 20% of the world’s oil supply flows.

Recent market reactions already show oil prices jumping sharply, and some analysts are warning prices could climb toward (or even above) $90–$100 per barrel if tensions continue and the strait is disrupted.

This could have a big impact on both mortgage rates and inflation. We all feel the pain of higher energy costs personally (I almost cried opening my gas bill this month) and those higher energy costs tend to feed into overall inflation. When inflation expectations rise, mortgage rates almost always follow and go up as well 😭

So, while a sudden geopolitical event can push rates down briefly as investors seek safety, ongoing disruptions in energy markets (especially oil) can push rates higher and keep them there for longer. We'll be watching very closely on how this plays out.

Industry Giants Join Forces - Buyers Will Pay

This past week, Rocket, Compass, and Redfin announced a partnership. Conveniently, the press release left out the part that really matters to buyers and the industry.

By now, we've all heard about the Compass vs. Zillow drama. Last year, Zillow blocked Compass from marketing their private and "coming soon" listings, which equates to over 500,000 homes. In response, Compass gave Zillow the proverbial middle finger and teamed up with Rocket and Redfin. Now these listings will flow straight into Redfin, with Rocket Mortgage as the preferred lender. Buyers can snag 1% off their mortgage rate in year one or up to $6,000 in lender-paid credits by using Rocket Mortgage.

Whatever, sounds fine...Until you realize these specific listings will hide days on market and price reductions, what Compass calls “negative insights.” That’s the very info buyers need to make smart offers, and now it’s gone, all for the seller’s advantage. 

Think of it like buying a used car with the odometer missing. Sure, the car looks like a beaut, but you have no idea how many miles are actually on it. All while the seller knows every detail. For homebuyers, that means guessing on price while the seller is holding all the cards.

This is part of a bigger trend: consolidation and industry control. Rocket now controls the search platform, listings, servicing, and mortgage process. Every consumer touchpoint funnels to one lender. One.

Meanwhile, housing affordability is at a crisis point. Interest rates still hovering around 6%, tight inventory, first-time buyers getting squeezed...all while the industry’s solution is limiting choice. This is a problem we can’t ignore.

Mortgage Rates Finally Dip Below 6%!

We finally did it! For the first time since September 2022, the average 30-year fixed mortgage rate has dropped below 6%! Woohoo! After peaking near 7.875% in October 2023, rates have been gradually declining, helped by Fed rate cuts and recent government purchases of mortgage-backed securities.

While this isn’t anywhere near the pandemic-era lows of 2.5%, it’s a psychologically important milestone. Many homeowners have held onto older, cheaper mortgages, and some potential buyers have stayed on the sidelines waiting for rates to drop. A sub-6% rate could finally fyre up buyers into action. Nick and I are already seeing more refinancing inquiries just from the news. It’s a spring-like stir in the market, but not a full thaw yet.

We do still see housing affordability as a true crisis. Median home prices ended last year at $405,000, which is crazy. Inventory is still super tight. Many experts are warning that unless supply increases, even lower rates won’t make homes more affordable. We tend to agree as we can see prices rising again as demand continues to build without additional inventory.

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