The Iran war is starting to hit the homefront.
Home mortgage rates have risen 60 basis points since the U.S. began its bombing campaign against Iran one month ago, with the average interest rate on the 30-year fixed loan jumping from 5.99 percent on Feb. 28 to nearly 6.5 percent today, according to Mortgage News Daily.
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The 30-year home mortgage rate now sits at its highest level since October 2025, nearly seven months ago.
The 10-year Treasury, which sets the tone for most interest rates across the economy, including mortgages, has risen from 3.96 percent the day before the war began to 4.4 percent as of the morning of March 27.
With higher prices has come less demand; CNBC reported this week that refinancings have dipped 15 percent over the last week and mortgage applications to purchase homes fell 5 percent in that same time frame, as well.
“Higher housing costs, along with the economic uncertainty that comes along with the Iran war and rising oil prices, are pushing some house hunters to the sidelines,” wrote Dana Anderson of Redfin, a residential real estate brokerage. “Pending home sales fell 1 percent year over year, the biggest decline in a month.”
Even those who are serious buyers are getting cold feet. Approximately 13.7 percent of homes that went under contract in February 2026 (roughly one out of seven), were canceled, rising from 12.8 percent in February 2025, according to RedFin.
The news of poor housing metrics is yet another dint in the armor of the U.S. economy. CO reported earlier this month that U.S. employers cut 92,000 jobs last month, causing the unemployment rate to reach 4.4 percent, up from 4.3 percent in January, according to the Bureau of Labor Statistics (BLS).
This marks the third time in five months the U.S. has reported negative job growth.
Moreover, the stock market has dropped precipitously since President Donald Trump began the war with Iran, as the Dow Jones Industrial Average is down 6 percent in the last month, with the S&P 500 falling 5.8 percent.
Brian Pascus can be reached at bpascus@commercialobserver.com.