Iran War Drives Up Mortgage Rates. Here’s How to Secure Lower Rates Mortgage rates have risen again as the war in Iran intensifies, reversing a recent decline that had brought rates below 6% for the first time in four years. Economists warn that rates could continue to fluctuate throughout 2026 if the conflict persists, though they remain significantly lower than they were a year ago. Homebuyers are advised to adopt strategic approaches to secure favorable borrowing costs amid the uncertainty. The connection between mortgage rates and oil prices has become more pronounced since the war began on February 28. As oil prices surged, so did mortgage rates and the 10-year Treasury yield. On March 9, oil prices reached a peak of $119.48 per barrel, while the 10-year Treasury yield climbed from 3.96% to 4.21% between February 27 and March 11. Average mortgage rates followed a similar trend, rising from 5.99% to 6.19% during the same period. Experts note that while the war has disrupted global oil markets, the long-term impact on mortgage rates may be less severe than in 2008, when U.S.-Iraq tensions caused oil prices to spike. At that time, mortgage rates rose from 5.91% to 6.48% over the course of the year. However, the U.S. has since reduced its reliance on foreign oil, with imports dropping by 35% since 2008. Despite this, the war could still strain global supply chains and inflation, according to analysts. The relationship between oil prices and mortgage rates is rooted in economic dynamics. Higher oil costs increase production and transportation expenses, which are passed on to consumers. This often leads to inflation, prompting investors to demand higher returns on bonds and mortgages.#iran_war #oil_prices #mortgage_rates #10_year_treasury_yield #redfin
