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At the last Federal Reserve board meeting on March 17-18, as expected, they voted to maintain rates. While we expected the Fed to not change the Federal Funds rate, the newest consideration was not on their radar at the last meeting - the Iran War.
Since February 28, 2026 when the United States and Israel decided to launch coordinated airstrikes against Iran, crude oil prices have skyrocketed from about $70 a barrel to now about $100 a barrel. You may be asking -- what does oil have to do with mortgage rates?
The answer lies in inflation. As oil prices rise, the cost of gas, energy and supply chain costs also go up which then gets passed along to the consumer. As more money gets pumped into the economy, inflation goes up. As inflation goes up, so do mortgage rates. Economists are now predicting rates to stay in the mid 6% range if not higher through the end of the year. Hopefully once the war ends, inflation will come back down and provide some relief on mortgage rates.
Does this mean the real estate industry is now dead because of the war? Quite the contrary.
While currency may flucuate and even collapse, what doesn't collapse is real estate. People don't stop needing a place to live or work.
In the 1920's when Germany's currency collapsed as prices were consistently doubling, those who held hard assets such as real estate and land survived and came out far ahead of those who just held cash. Protect yourself by moving your assets into real estate now, before everyone else does.
