The ongoing conflict in Iran is driving the mortgage market right now. Since mortgage rates follow the bond market, anything big happening globally like war will move rates quickly.
Normally, uncertainty (like war) helps lower rates. Investors tend to move money out of stocks and into safer options like bonds, which pushes rates down.
But this time, there’s a twist. The war is affecting key energy routes, which has pushed oil prices higher. Higher energy costs = higher inflation. And when inflation rises, interest rates tend to go up, not down.
What the market is saying right now:
- No expectation of a Fed rate cut anytime soon
- Small chance rates could actually go higher
- Mortgage rates have already climbed, now sitting around 6.6%
Even though stocks have been falling (which usually helps rates), inflation concerns are outweighing that benefit.
Big takeaway:
As long as the war continues and keeps pressure on oil prices, rates are likely to stay elevated or rise further. If the conflict ends, rates could improve but don’t expect a quick drop back to earlier lows.
Bottom line for buyers and homeowners:
Rates aren’t just about the economy right now, they’re being driven by global events. And that means continued volatility.
