Rising Mortgage Rates Amid Geopolitical Tensions

Mortgage rates in the United States have risen to 6.11% for the week ending March 12, 2026, marking the largest weekly increase since April 2025. This uptick follows a brief period where rates dipped below 6% for the first time since 2022, raising hopes for home buyers. The increase is attributed to investor concerns regarding the economic impact of President Donald Trump’s military actions against Iran, which have led to rising oil prices and inflation fears. The yield on the 10-year U.S. Treasury note, a key benchmark for mortgage rates, has climbed to 4.25%, up from below 4% prior to the conflict.

CNNOngoing Middle East Conflict Pushes U.S. Mortgage Rates Higher Mid-MarchNew York TimesAverage US long-term mortgage rate rises to 6.11%, back to where it was 5 weeks ago

The recent military operation, dubbed Operation EPIC FURY, initiated by the U.S. and Israel against Iran, has exacerbated existing economic uncertainties. Analysts indicate that prolonged conflict could lead to sustained high oil prices, further inflating costs and complicating the Federal Reserve's ability to lower interest rates. Sam Khater, Chief Economist at Freddie Mac, noted that while the uptick in mortgage rates is modest, it reflects the ongoing volatility in the market influenced by geopolitical tensions.

Ongoing Middle East Conflict Pushes U.S. Mortgage Rates Higher Mid-March

The housing market has been sluggish since the pandemic, with many homeowners reluctant to sell due to previously low mortgage rates. Despite the recent rise in rates, existing-home sales increased by 1.7% in February, suggesting some resilience among buyers. However, experts warn that the outlook for the spring homebuying season has dimmed due to the uncertainty surrounding the conflict in the Middle East. Lisa Sturtevant, Chief Economist for Bright MLS, stated that if the conflict is limited, the housing market could rebound quickly; however, a prolonged conflict could stall sales activity.

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In response to the rising rates, President Trump has publicly urged Federal Reserve Chair Jerome Powell to lower interest rates, emphasizing the need for immediate action. Despite these calls, the Federal Reserve's decisions do not directly set mortgage rates but influence them through monetary policy. Hannah Jones, a senior economic research analyst at Realtor.com, remarked that the geopolitical situation is overshadowing other economic indicators that would typically lower rates.

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Critics argue that the current geopolitical tensions are being used as a scapegoat for the housing market's ongoing struggles. Some analysts believe that the combination of high prices, elevated mortgage rates, and a persistent housing shortage has already excluded many potential buyers from the market, regardless of external factors.

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While the average mortgage rate has risen to 6.11%, some sources indicate that rates remain significantly lower than a year ago, when they averaged 6.65%. This discrepancy highlights the complexity of the current housing market, where rising rates are juxtaposed with a backdrop of improved affordability metrics.

Average US long-term mortgage rate rises to 6.11%, back to where it was 5 weeks ago

As the spring homebuying season approaches, market observers will closely monitor the developments in the Middle East and their potential impact on oil prices and inflation. The Federal Reserve's upcoming decisions will also be pivotal in shaping the mortgage landscape in the coming months.

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