LOS ANGELES (AP) — The economic fallout from the war with Iran is driving up the cost of buying a home, even as other housing market trends in many parts of the country favor home shoppers this spring.
Mortgage rates have been rising since the war began, as surging energy prices heighten worries about higher inflation, pushing up the yield on U.S. 10-year Treasury bonds, which lenders use as a guide to pricing home loans.
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Anne King poses for a photo in the backyard of the home she recently purchased, in Fort Worth, Texas, Tuesday, March 31, 2026. (AP Photo/LM Otero)
Anne King poses for a photo at the home she recently purchased, in Fort Worth, Texas, Tuesday, March 31, 2026. (AP Photo/LM Otero)
Gail and David Sanders stand in front of their home which they have been trying to sell Wednesday, March 25, 2026, in Olathe, Kan. (AP Photo/Charlie Riedel)
Gail and David Sanders stand in front of their home which they have been trying to sell Wednesday, March 25, 2026, in Olathe, Kan. (AP Photo/Charlie Riedel)
Gail and David Sanders stand in front of their home which they have been trying to sell Wednesday, March 25, 2026, in Olathe, Kan. (AP Photo/Charlie Riedel)
As recently as the last week of February, the average rate on a 30-year mortgage dropped to just under 6%, its lowest level in more than three and a half years. It climbed this week to 6.46%, its highest level in nearly seven months.
The conflict is also injecting more uncertainty into the U.S. economic outlook at a time when the job market is sputtering.
While rates are still down from a year ago, their recent upward trend has already led to a slowdown in mortgage applications. Further increases threaten to put a damper on home sales during what’s traditionally the busiest time of the year for the housing market.
“The war in Iran has seriously complicated the spring buying season,” said Joel Berner, senior economist at Realtor.com. “I expect that many buyers will be put off by rising rates and mounting economic uncertainty, choosing to bide their time rather than jumping on board for a purchase before rates go up.”
Home shoppers who can afford to buy at current mortgage rates this spring are likely to find a more buyer-friendly housing market than this time last year. That means they'll have more leverage when negotiating with sellers, who in many cases are watching their property go unsold for weeks, potentially making them more willing to lower their initial asking price or offer buyers money for closing costs, repairs or other concessions in order to get a deal done, real estate agents say.
In the Dallas-Fort Worth metro area, lower listing prices and more homes on the market are forcing many sellers to price their home more competitively or consider offering some incentives to land a buyer, said Matthew Crites, an agent with Coldwell Banker Realty.
“It’s been a really good buyer’s market to kind of start the year off with,” he said.
The trends helped give home shopper Anne King a strong hand when she set her sights on a three-bedroom, two-bath ranch-style house in Fort Worth listed at $275,000.
The contract administrator offered $10,000 below the listing price. She also asked that the seller kick in $5,000 toward closing costs. The seller accepted, and later agreed to throw in another $12,000 for repairs after a home inspection revealed roof damage.
“Fortunately for me, the seller was in a position they needed to sell,” said King, 57. The purchase was finalized in late February, just before the start of the conflict in the Middle East.
King had hoped mortgage rates would ease further before she bought the home, but decided it made sense to buy sooner, rather than risk having to compete this spring against more homebuyers who could potentially trigger a bidding war -- something she experienced last May when she bought a two-bedroom, two-bath townhouse in Arlington, Texas.
She locked in a 6% rate on her mortgage and plans to refinance to a lower rate whenever rates drop.
“I feel like I got a good deal on this property, and that’s all that matters,” she said.
While the inventory of homes for sale nationally is still low by historical standards, active listings — a tally that encompasses all homes on the market except those pending a finalized sale — jumped nearly 8% in February from a year earlier, according to data from Realtor.com.
The increase varies across the U.S., with the West, Midwest and South far outpacing the Northeast. Still, some 43 of the 50 largest metro areas had more homes for sale in February than a year earlier, with listings up between 10% and 38.5% in many markets, including Seattle, Indianapolis, Las Vegas and Houston and Denver.
As homes take longer to sell, prices have started falling. The median listing price was down in February from a year earlier in just over half of the nation’s biggest 50 metro areas, including a nearly 9% drop in Austin and Memphis, and declines of more than 5% in Washington D.C., San Diego and Los Angeles.
In another sign that buyers may have the edge negotiating with sellers this spring, an analysis by Redfin estimates that there were about 46% more sellers than prospective buyers in the market nationally in February. That’s up from about 30% a year earlier and represents the largest gap between buyers and sellers on records going back to 2013, according to Redfin.
Miami, Nashville and Austin are among the metro areas where sellers most outnumber buyers, Redfin found.
The U.S. housing market has been in a sales slump since 2022, when mortgage rates began to climb from pandemic-era lows. Sales of previously occupied U.S. homes were essentially flat last year, stuck at a 30-year low. They have remained sluggish so far this year, declining in January and February versus a year earlier.
While the pace of home price growth has slowed or fallen in many metro areas, affordability hurdles remain daunting for many aspiring homebuyers because wage growth has not kept up with home prices.
Consider, the median price of an existing home sold in February was $398,000, according to the National Association of Realtors. That's nearly five times the median household income. A historic rule of thumb was that homes generally cost three times the household income.
The recent increase in mortgage rates adds slightly to the affordability challenge. On a $400,000 home near downtown Dallas, for example, factoring in a 20% down payment and a 30-year mortgage at 6%, the buyer’s monthly payment would be about $2,248. At a 6.4% rate, that payment would climb to $2,331.
And while mortgage rates are still lower than a year ago, making monthly payments more manageable, rates are still much higher than the sub-3% averages available to homebuyers during most of 2020 and 2021 as the weakened economy dealt with the coronavirus pandemic and its aftermath.
The housing market has cooled considerably since earlier this decade, when rock-bottom mortgage rates set off a frenzy that sent home prices soaring. Back then, it wasn’t uncommon for a home to fetch well above the seller’s asking price after receiving offers from multiple buyers.
While some sellers are still receiving multiple offers now, it’s far from the norm.
Jo Chavez, a Redfin agent in Kansas City, tells clients looking to sell to expect that their home probably won’t sell right away. She also advises them to be “reasonable” with how they price their home.
“We have a lot of sellers who have that idea of like, ‘well, my neighbors sold for this much, and so I think I should price $10,000 above them,’” said Chavez. “And that’s obviously not a logical approach, because there were less sales last year.”
Kansas City is among the few metro areas where the median listing price isn’t falling. It rose 4.1% in February from a year earlier, according to Realtor.com. However, the number of homes on the market soared by nearly 20%.
Gail Sanders and her husband, David, put their four-bedroom, three-bath home in Olathe, Kansas, on the market in late February. But even after hosting a couple of open houses, and after lowering their asking price from $535,000 to $525,000, the couple had yet to receive any offers as March drew to a close.
The couple wants to sell the house and buy a home in another Kansas City suburb closer to their three adult children and grandchildren. But until they find a buyer, those plans are on hold.
“We just didn’t think it was fair to somebody else to put a contingent offer on (another house), but then also lock ourselves into something when we weren’t sure how fast ours was going to move,” said Gail Sanders, a senior claims director. “I don’t want to be stuck with two house mortgages on the off chance.”
Anne King poses for a photo in the backyard of the home she recently purchased, in Fort Worth, Texas, Tuesday, March 31, 2026. (AP Photo/LM Otero)
Anne King poses for a photo at the home she recently purchased, in Fort Worth, Texas, Tuesday, March 31, 2026. (AP Photo/LM Otero)
Gail and David Sanders stand in front of their home which they have been trying to sell Wednesday, March 25, 2026, in Olathe, Kan. (AP Photo/Charlie Riedel)
Gail and David Sanders stand in front of their home which they have been trying to sell Wednesday, March 25, 2026, in Olathe, Kan. (AP Photo/Charlie Riedel)
Gail and David Sanders stand in front of their home which they have been trying to sell Wednesday, March 25, 2026, in Olathe, Kan. (AP Photo/Charlie Riedel)
The search is on for one missing U.S. service member while another was rescued after two U.S. warplanes went down in separate incidents including the first shoot-down since the Iran war began nearly five weeks ago.
The incidents occurred just two days after President Donald Trump said in a national address that the U.S. has “beaten and completely decimated Iran.”
One fighter jet was shot down in Iran, officials said. A U.S. crew member from that plane was rescued, but a second was missing, and a U.S. military search-and-rescue operation was underway.
Separately, Iranian state media said a U.S. A-10 attack aircraft crashed in the Persian Gulf after being struck by Iranian defense forces. A U.S. official, speaking on condition of anonymity to discuss a sensitive military situation, said it was not clear if the aircraft crashed or was shot down.
The war now entering its sixth week is destabilizing economies around the world as Iran responds to the U.S. and Israeli attacks by targeting the Gulf region's energy infrastructure and tightening its grip on oil and natural gas shipments through the Strait of Hormuz.
Here is the latest:
Iranian Foreign Minister Abbas Araghchi said in a social media post on Saturday that Iran has "never refused to go to Islamabad.”
He said what Iran cares about "are the terms of a conclusive and lasting END to the illegal war that is imposed on us.”
Pakistan said last week that it would soon host talks between the U.S. and Iran. It is not clear when or if the talks will take place.
Iranian Foreign Minister Abbas Araghchi posted on social media on Saturday that radioactive fallout from continued attacks on the Bushehr nuclear power plant “will end life” in regional capitals, not Tehran.
He accused Western governments of remaining silent about the repeated attacks on the plant.
The fourth attack on the Bushehr complex occurred Saturday, killing a security guard and damaging a support building. No increase in radiation levels was reported, according to the International Atomic Energy Agency.
Bushehr is located some 750 kilometers (465 miles) south of Iran’s capital, Tehran.
The facility uses low-enriched uranium from Russia, along with Russian technicians, to supply about 1,000 megawatts of power for Iran.
The finance ministers of Spain, Germany, Italy, Portugal and Italy say that a European Union-wide tax on energy companies’ profits would distribute the burden more fairly.
The call, made public Saturday, comes amid concerns that surging oil and gas prices driven by the Iran war will fuel inflation and strain households.
Europe is largely dependent on imported oil and gas, leaving it vulnerable to external shocks.
In 2022, turmoil in energy markets following Russia's full-scale invasion of Ukraine pushed inflation into double digits in many European countries.
Omar al-Waeli, head of Iraq’s Border Ports Authority, said on Saturday that the strike on the Shalamcheh border crossing killed one person and wounded five others.
Authorities did not offer further details on the strike. But trade and passenger traffic is suspended at the crossing, which is crucial for Iranian imports and Iranian pilgrims headed to Iraq’s Shiite shrines.
The Iraqi government said it was directing traders and travelers to alternative crossings.
The International Atomic Energy Agency said on Saturday that it has been informed by Iran about the strike near the premises of the Bushehr nuclear facility that killed a security guard and impacted a building in the complex.
“No increase in radiation levels was reported” following the strike, the IAEA said in a social media post.
Bahrain’s Defense Ministry reported the tally in a social media post on Saturday.
This brings the total number of projectiles fired at the country since the start of the war to 188 missiles and 453 drones.
Bahrain hosts the U.S. Navy’s 5th Fleet.
The Atomic Energy Organization of Iran said in a social media post Saturday that an airstrike near its Bushehr nuclear facility killed a security guard and damaged a support building.
It is the fourth time the facility has been targeted during the war.
The Bushehr nuclear power plant uses low-enriched uranium from Russia, along with Russian technicians, to supply about 1,000 megawatts of power for Iran.
Its pressurized-water reactor can power hundreds of thousands of homes and other businesses and industries. But it contributes only 1% to 2% of Iran’s total power needs.
Iran has been trying to expand the facility to multiple reactors. In 2019, it began a project that ultimately plans to add two additional reactors to the site, each adding another 1,000 megawatts apiece.
Italian Premier Giorgia Meloni has discussed with Saudi Prime Minister Mohammed bin Salman defensive military assistance that Italy is providing against Iranian reprisals to U.S.-Israeli attacks.
A brief statement from Meloni's office Saturday did not specify what type of assistance Italy is providing.
It also said the two discussed diplomatic efforts to end the war, the importance of opening the Strait of Hormuz and “more broadly how to promote a regional framework that can break free from the current cycle of conflict.”
Meloni will continue her visit in Qatar and the United Arab Emirates.
U.S. and Israeli warplanes continued to pound Iran Saturday, hitting several targets including a petrochemical facility, Iranian media reported.
Iran's official English-language newspaper Tehran Times reported that an airstrike hit a facility belonging to Iran’s Agriculture Ministry in the western city of Mehran.
The newspaper said another air raid struck Mahshahr Special Petrochemical Zone in the southwestern Khuzestan province.
The semiofficial Fars news agency reported several explosions heard late Saturday morning in the facility.
Mehr, another semiofficial news agency, reported that the strikes hit four companies within the zone.
Mohammad Bagher Qalibaf made the veiled threat in a social media post late Friday, asking about how busy oil tanker and container ship traffic is through the strait.
The 20-mile (32-kilometer) strait links the Red Sea with the Gulf of Aden and the Indian Ocean and is one of the busiest chokepoints in global trade, with more than a tenth of seaborne global oil and a quarter of container ships passing through it.
Iran has already greatly disrupted the flow of oil through the Strait of Hormuz, sending fuel prices skyrocketing and jolting the world economy.
Disrupting transit through the Bab el-Madeb would force shipping firms to route their vessels around the Cape of Good Hope at the southern tip of Africa, further hitting prices.
Israel’s rescue services said Saturday the man sustained glass shrapnel wounds after an Iranian missile hit the central city of Bnei Brak.
It wasn't clear if the glass shrapnel was caused by a direct strike or falling debris from an intercepted missile.
Israel’s Magen David Adom rescue services said it was taking the man to the hospital.
The Iranian judiciary's Mizan news agency said Saturday that the two men who were hanged belonged to the Iranian exile group Mujahedeen-e-Khalq.
The agency said Abul-Hassan Montazer and Vahid Bani-Amirian were convicted of “being members of a terrorist group.”
This brings to six the total number of MEK members executed since the start of the war.
Activists and rights groups say Iran routinely holds closed-door trials in which defendants are unable to challenge the accusations they face.
The Israeli military said on Saturday that its air force struck ballistic and and anti-aircraft missile storage sites in Tehran.
It said the strikes a day earlier included weapons manufacture sites as well as military research and development facilities in the Iranian capital.
It said the strikes are part of an ongoing phase to increase damage to Iran's “core systems and foundations.”
Authorities in Dubai said the facades of two buildings were damaged by debris from intercepted drones, including one belonging to U.S. tech firm Oracle. No injuries were reported.
Iran’s Revolutionary Guard has threatened to attack Oracle and 17 other U.S. companies after accusing them of being involved in “terrorist espionage” operations in Iran.
Previous Iranian drone strikes caused damage to three Amazon Web Services facilities in the United Arab Emirates and Bahrain.
As of Friday, 247 of the wounded were Army soldiers, 63 were Navy sailors, 19 were Marines and 36 were Air Force airmen, according to Pentagon data available online.
It is unclear if the data includes any of the service members involved in the downing of two combat aircraft reported Friday.
Most of the wounded — 200 — were also mid to senior enlisted troops, 85 were officers and 80 were junior enlisted service members.
The current death toll remains at 13 service members killed in combat.
Palestinian Muslims attend Friday prayers outside Jerusalem's Old City due to restrictions linked to the Iran war, April 3, 2026. (AP Photo/Mahmoud Illean)
Tamara and her sister Amal color pictures on the floor as their parents, Sara and Ahmed, who fled their village of Khiyam in southern Lebanon due to Israeli bombardment, sit inside a tent used as a shelter in Beirut, Lebanon, Friday, April 3, 2026. (AP Photo/Emilio Morenatti)
Mohammad Qubaisi, 53, with burn wounds from an Israeli airstrike on southern Lebanon undergoes surgery by Dr. Mohammed Ziara, left, and his team, at the Sidon Government Hospital in Sidon, Lebanon, Thursday, April 2, 2026. (AP Photo/Emilio Morenatti)
A bridge struck by U.S. airstrikes on Thursday is seen in the town of Karaj, west of Tehran, Iran, Friday, April 3, 2026. (AP Photo/Vahid Salemi)
FILE - An F-15E Strike Eagle turns toward the Panamint range over Death Valley National Park, Calif., on Feb. 27, 2017. (AP Photo/Ben Margot, File)
