U.S. mortgage rates rose for a fourth straight week, reaching the highest point in six months, and prospects for a crucial spring loan were bleak as the Iran war roiled markets.
The average rate for 30-year, fixed loans rose to 6.38% — the highest since September 2025 and up from 6.22% last week, according to Freddie Mac data Thursday. At the current 30-year average, borrowers with a $1 million loan would pay approximately $6,242 per month, not including insurance and taxes. That’s up from $5,983 in late February when rates briefly fell below 6% just before the Iran war began.
As the key spring selling season begins, the rate hike adds yet another reason for buyers to be hesitant, raising concerns about everything from the higher cost of gas and groceries to the possibility of AI taking away their jobs. It’s too early to know how the season will play out, but early reports from homebuilders aren’t promising.
During a March 24 earnings call with analysts, KB Home lowered its full-year guidance for closing, citing the Iran war as a contributing factor.
“We saw very strong sales results in the first week of March,” said Chief Executive Officer Robert McGibney. “But the last few weeks have been a little milder than we’d like to see or what we usually get at this time of year.”
He said the duration of the conflict will determine consumer confidence, “but right now we think it’s having an impact on the consumer.”
Sure, borrowing costs are still below the 6.65% average from a year ago, but the gap is narrowing. Signs of a weak housing market were already visible before the conflict began about a month ago. Home prices in February were little changed from January, the slowest monthly increase in seven months, according to seasonally adjusted data from brokerage Redfin.
According to Shahryar Bukhari, principal economist at Redfin, the weak market could give some buyers negotiating power, as long as they have the income and patience to move forward.
“Homebuyers in many markets are having success asking for discounts and other concessions, and they have the luxury of time because they are not facing as much competition,” Bukhari said.
