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By Giulia Carbonaro
Senior Reporter
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Mortgage rates jumped back above 6 percent this week as a result of growing inflation fears as oil prices climbed after the U.S. and Israel intensified their war with Iran.
As of Monday, the average 30-year fixed-mortgage rate was 6.12 percent, according to the latest data by Mortgage News Daily, up 0.13 percentage points from the previous day. For hundreds of thousands of would-be homebuyers in the U.S., this is a blow: the move came just days after rates briefly dipped below 6 percent for the first time since 2022, a psychologically important threshold for buyers heading into the spring selling season.
But experts are not sure whether this sudden climb in mortgage rates is just a "temporary blip," as Realtor.com writes, or whether the conflict—however long it will last—will have a more durable impact on borrowing costs in the nation.
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A Step In The Wrong Direction
Borrowing costs have a significant impact on home-buying. During the pandemic, when mortgage rates were as low as 2-3 percent, historically low borrowing costs combined with the rise of remote work unleashed a wave of demand for housing across the country.
When mortgage rates surged to 6-7 percent as a result of the Federal Reserve’s aggressive rate-hiking campaign starting in 2022, would-be buyers already struggling with higher housing costs withdrew to the sidelines of the market, while sellers found themselves locked in with the homes they had bought at a much lower rate.
As home prices are still rising and mortgage rates remain historically high, the U.S. housing market has been sluggish, with falling sales and a growing gap between sellers and buyers. Lower mortgage rates are a key factor that could revitalize the market and boost sales, according to experts.
The War’s Impact On Mortgage Rates
Last week, mortgage rates finally fell below 6 percent, to 5.99 percent. While mortgage rates are still in the low 6 percent range, their inching back above the 6 percent mark signals a reversal in the recent downward trend which could alarm would-be homebuyers.
Normally, mortgage rates are influenced by expectations on the U.S. economy, including inflation and investor demand for mortgage-backed securities. But events—such as the U.S.-Israeli strikes which killed Iran’s Supreme Leader, Ayatollah Ali Khamenei—can have an immediate impact on their fluctuations.
After the U.S. and Israel started bombing the Middle Eastern country on Saturday, Brent surged more than 8 percent to $79 a barrel on Monday, and the yield on the 10-year Treasury rose more than 11 basis points to 4.05 percent.
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Kristian Kerr, head of Macro Strategy for LPL Financial, told Newsweek the energy market was the primary way through which this crisis was likely to impact global markets.
"Any sustained disruption to oil or natural gas flows, especially if both severe and long lasting, have the potential to influence inflation expectations, weigh on business confidence, and elevate volatility across asset classes," he said. "In simple terms, the more intense and prolonged the geopolitical shock, the larger the likely market impact."
These dynamics could be seen unfolding when the markets opened on Monday, said Kerr, and could continue in the coming weeks.
"A sustained period of elevated prices would place upward pressure on inflation expectations, and that in turn could have broader consequences for both equity and interest rate markets," said Kerr.
However, Kerr added, persistent rise in crude prices would only materialize with a more prolonged or even total shutdown of the Strait of Hormuz, usually used daily by about 100 ships transporting oil. The strait carries one-fifth of the oil consumed globally, on top of large quantities of gas.
Higher oil prices could bring up other costs—including shipping, production, and travel, raising inflation expectations. This could affect the bond market, with investors demanding higher yields to lend money, eventually pushing up mortgage rates.
"Up until this point in 2026, mortgage rates had been on a consistent and relatively speedy decline," said Realtor.com senior economist Joel Berner. "This disruption to the bond market certainly has the potential to undo those gains, and if we do see persistent inflation resulting from the conflict, this could be the start of an upward trend rather than just a one-off bounce-back."
What Does This Mean For Housing?
While conflict in the Middle East could add volatility, labor data will "drive the real signal" of the direction mortgage rates are going to take, according to Jeff DerGurahian, mortgage lender loanDepot’s chief investment officer and head economist.
"If the employment data comes in weak, mortgage rates could fall further and help unlock more housing activity," he told Newsweek. "That aside, it's all about employment, employment, employment.
"With the ADP payroll report out Wednesday and the Bureau of Labor Statistics (BLS) February payroll report following on Friday, the market is bracing for the possibility of a materially weak labor print, as softness bubbling under the surface could show up as an unexpectedly weak headline number," added DerGurahian.
"Significantly weak data could send rates even lower from here and more firmly establish a new period of sub-6 percent mortgages and a sub-4 percent 10-year yield."
A lot will also depend on how long the Iran war lasts. On Monday, President Donald Trump said the conflict could last "far longer" than the four-to-five weeks he had initially estimated.
The war is unfolding ahead of spring home-buying season in the U.S., the busiest time of the year for the market and one that experts were hoping would witness a boost in sales driven by lower mortgage rates.
"With the spring housing season here, every tick lower in mortgage rates has a double effect—more buyers can qualify, and more would-be sellers are willing to list because they feel less locked into their 3 percent COVID-era mortgage," said DerGurahian.
"That said, a true housing market ‘unlock’ will likely require 30-year fixed rates in the 4 percent range."
Correction 3/3/26, 11:19 a.m. ET: This article has been corrected to clarify comments made by Jeff DerGurahian that were previously misattributed.
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