04/03/2026
A Longer Conflict Could Slow Home Sales
The ongoing conflict with Iran is already having an impact on the U.S. housing market—primarily through rising mortgage rates. Just before things escalated on February 28th, the average 30-year fixed rate was sitting at 5.99%. Since then, it’s climbed to around 6.5%.
Right as we’re heading into what’s typically the strongest selling season of the year, the market finds itself in a bit of a balancing act—showing signs of long-term improvement, but dealing with some short-term uncertainty.
Originally, there was hope this would be a quick and decisive situation, but as it stretches beyond a month, economists are starting to look at what a longer conflict could mean for home sales.
According to forecasts from Zillow’s chief economist:
If things wrap up by the end of April, home sales could still increase by about 3.5% this year.
If it drags into July, that growth drops to roughly 2.3%.
If it continues through August, gains could slow to just over 1%.
And in a more prolonged scenario—where rates stay elevated and unemployment ticks up slightly—we could actually see home sales decline by about 0.7%.
Bottom line: the longer this uncertainty sticks around, the more pressure it puts on the housing market.
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