Why Realtors Are Worried About The Iran War

TL;DR

The Iran war rattled the spring housing market by spiking mortgage rates to 6.6% and stoking buyer fears over jobs, inflation, and economic stability.

Key Points

• 1.The Iran war directly disrupted the spring housing market. Mortgage rates jumped from 5.99% the day before the war started to around 6.6%, eroding affordability and pushing buyers who were on the fence to abandon purchases altogether.
• 2.Buyer concern shifted sharply from home prices to the economy. Only 9% of agents said buyers were most concerned about home prices, down from 18% the prior quarter, as fears over job security, gas prices, and AI-driven job displacement took over.
• 3.Homes are sitting longer and cancellations are rising. 31% of agents reported listings on the market for more than six weeks (up from 26% in Q4), and more than half reported at least one contract cancellation, with stubborn sellers refusing to cut asking prices.
• 4.Optimism about a market recovery has dropped significantly. Just over half of agents expect conditions to improve — a sharp decline from end-of-last-year sentiment — and some sellers who planned spring listings are now delaying until fall to wait and see.