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This has been a rough week on numerous levels, and mortgage rates are no exception. The average rates starting with a five that we saw in February — somehow only four weeks ago — now feel like a fever dream.
The average rate on a 30-year fixed-rate mortgage rose to 6.34% APR in the week ending Mar. 26, according to rates provided to NerdWallet by Zillow. A basis point is one one-hundredth of a percentage point.
If you’re wondering whether higher mortgage rates are yet another consequence of the war in Iran, yes, they are. And the combination of more costly borrowing, higher prices for household goods and overall economic uncertainty could squash the spring homebuying season before it’s even really begun.
Buyers already backing off
There isn’t really a good time for higher mortgage rates, but March hurts especially badly. It’s officially spring, so we expect new for-sale signs to start popping up along with the crocus and daffodils as homebuying season commences.
Not to dwell on the past, but the sub-6% mortgage rates we saw in February had home buyers and refinancers feeling exuberant. In the last full week of February, the Mortgage Bankers Association saw refinance applications at their strongest pace since 2022, with purchase applications also up nearly 10% year over year. That application surge buckled almost immediately as rates moved higher in March.
And why did mortgage rates move higher? Mortgage rates closely track the bond market, and bonds are less attractive in times of high inflation. The war in Iran, which began on the last day of February, rattled markets and stoked what quickly turned out to be well-founded inflation fears.
The world’s energy supply has been throttled, as much of it needs to pass through the Strait of Hormuz, bordered by Iran on one side. Oil isn’t the only commodity affected: Supplies of petrochemicals needed to make plastics and fertilizer vital to agriculture are among the materials also being choked. That’s why prices for all kinds of items could rise, not just gas — though Americans are already feeling considerable pain at the pump.
Higher mortgage rates have already proved a deterrent for some potential home buyers. But higher costs for basic household goods, food and gas could scuttle more folks’ plans. Earlier this month Redfin found that 25% of Americans said they were delaying or canceling a major purchase, like a home, due to the war in Iran, while 56% said the war would not affect their plans. And that survey was fielded just days into the conflict, when the war seemed potentially short-lived. Now, it’s been nearly a month — and a prolonged war could begin to weigh more heavily on potential home buyers’ outlooks.
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Let’s take a breath and look on the bright side for a moment (there is one, I promise!).
For one, as dismaying as March’s higher mortgage rates have felt compared to where we were in February, they’re still notably lower than at the same time last year. The average we’re seeing this week is almost half a percentage point lower than the final week of March 2025. And it’s not like this one week was even exceptionally bad: Our average to date for March 2026 is lower than all but one month of 2025.
When mortgage rates are lower, there’s also more hope for inventory to improve, as current homeowners may feel less shackled by the golden handcuffs of their ultra-low mortgage rates. Last year saw some home sellers delisting — pulling their homes off the market if they weren’t selling rather than lowering the listing price. According to Realtor.com, 2025 had the highest national delisting rate to date, though their economists have only tracked this data since 2022.
If 2025 was the year of delisting, it’s possible that 2026 could be the year of relisting. Redfin found that in January 2026 (the most recent month with data available), 3.6% of homes for sale in the U.S. had been delisted in 2025 and put back up for sale in 2026. It’s a record proportion of relistings, which Redfin has tracked since 2016.
Buying a home is daunting at the best of times, and clearly these are not those times. But they aren’t the worst, either — and home buyers who are up to the challenge may find a surprisingly mild spring market with less competition and more homes for sale.
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About the author
Kate Wood is a lending expert and certified financial health counselor (CHFC) who joined NerdWallet in 2019. With an educational background in sociology, Kate feels strongly about issues like inequality in homeownership and higher education, and relishes any opportunity to demystify government programs. Prior to NerdWallet, she wrote about home remodeling, decor and maintenance for This Old House.
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