Economy and Mortgage Rates Top Home Buyer Concerns in Q1
- Spring housing market is facing significant disruptions as a war in Iran impacts consumer sentiment and the national economy, according to data from the CNBC Housing Market Survey.
- The survey, which collected insights from 70 randomly selected real estate agents across the United States between March 24 and March 30, 2026, indicates that expectations for the...
- Mortgage rates have seen a notable shift in correlation with the onset of the conflict.
The U.S. Spring housing market is facing significant disruptions as a war in Iran impacts consumer sentiment and the national economy, according to data from the CNBC Housing Market Survey. Real estate agents report that home buyers in the first quarter of 2026 were more concerned with the broader economy and mortgage rates than with home prices.
The survey, which collected insights from 70 randomly selected real estate agents across the United States between March 24 and March 30, 2026, indicates that expectations for the spring season are falling short. This downturn is attributed to the war in Iran and its subsequent effect on employment concerns and inflation.
Mortgage Rate Volatility and Affordability
Mortgage rates have seen a notable shift in correlation with the onset of the conflict. The average rate on a 30-year fixed mortgage reached a low of 5.99% the day before the war in Iran began; however, rates have since risen and are currently hovering around 6.5%.
These higher rates contradict previous forecasts that predicted mortgage costs would be significantly lower this spring than they were during the previous year. Affordability is not improving at the pace experts had anticipated, leading to a drop in buyer demand and causing homes to remain on the market for longer periods.
The current environment reflects a broader trend of volatility. According to a Q1-2026 update from Veros, mortgage rates have been the primary obstacle for buyers since 2022. After reaching pandemic lows near 3%, rates climbed as the Federal Reserve tightened monetary policy to combat inflation, fluctuating between the mid-6% and low-7% levels throughout much of 2024 and 2025.
Consumer Sentiment and Economic Fears
The psychological impact of the geopolitical conflict is weighing heavily on potential homeowners. Real estate agents observe that buyers are experiencing fear regarding job security, inflation, and the cost of gasoline.
Faith Harmer, real estate agent in the Las Vegas metropolitan area
They’re fearful of the war, they’re fearful of gas prices, [for] their job security
These concerns are acting as a deterrent to pent-up demand that had been building among buyers who remained on the sidelines during previous years of surging prices and tight inventory.
Market Outlook for 2026
While the current spring market is struggling, some economic analyses suggest 2026 could serve as a potential inflection point for the industry. Veros indicates that the market may move toward a more balanced state characterized by more choices for buyers and marginal improvements in affordability, rather than a return to the ultra-easy conditions of the early 2020s.
The Federal Reserve is expected to maintain a holding pattern regarding rates during the first half of 2026, provided that unemployment and inflation remain steady. Veros suggests that mortgage rates will likely remain above 6%, though they may stay lower than the peaks seen in the previous year.
The current disruption caused by the war in Iran, however, has introduced new variables into this outlook, throwing cold water on the demand that agents expected to drive the spring season.