US Housing Market Faces Challenges Amid Iran Conflict
The US housing market is encountering difficulties as the effects of increased mortgage rates, driven by the US-Israeli war in Iran, begin to take hold.
Data from the National Association of Realtors (NAR) revealed that the number of homes sold in March reached its lowest point in nine months, declining by 3.6% compared to the previous month.
Last week, average rates for a standard 30-year fixed mortgage were at 6.37%, rising from 5.98% prior to the strikes on Iran that commenced in February.
"Some buyers feel like they're frozen - they don't know how to make their decisions because events like the ones we're talking about spring up so rapidly and so out of our control," said Andrew Vallejo, an estate agent in Austin, Texas.
NAR recorded 3.98 million existing home sales in the US during March, marking the lowest figure since June. These numbers mainly reflect transactions agreed upon before the outbreak of the war but indicate that the market was already showing signs of stress before the strikes began.
Analysts had anticipated a recovery in the housing market in 2026, following a decline in mortgage rates.
However, after decreases in January and February, mortgage rates have surged since the onset of the US-Israeli conflict. This increase is attributed to expectations that the US central bank may maintain interest rates to control inflation, diminishing hopes for further rate cuts by the Federal Reserve.
Thomas Ryan, North America economist at Capital Economics, noted indicators suggesting "weakening housing demand following a recent jump in mortgage rates and a collapse in consumer confidence." He added that both are "knock-on effects" of the Iran conflict.
Energy Bills and Economic Concerns
The sales figures for March were influenced by a decline in consumer confidence and softness in the US labor market, according to NAR chief economist Dr. Lawrence Yun.
Limited housing supply also contributed to an increase in the median home price to $408,800 (£304,000), representing a 1.4% rise compared to the previous year.
Vallejo, principal listing agent at Redfin, told the BBC that the war's impact could intensify if rising energy prices trigger a broader economic slowdown.
"It's a topic of concern that we're all aware of because it would make people lose jobs," Vallejo said.
"A lot of it has been buyers feeling like they should either wait a little bit... and then for sellers, I think that in their mind they were hoping it would be a bit of a less chaotic world this year and things would be a little bit more calm."
