If you were expecting spring 2026 to be the housing market's long-awaited comeback story, you weren't wrong to hope. Heading into the new year, nearly every indicator was pointing in the right direction — mortgage rates were falling, inventory was building, and buyers were finally getting a little breathing room. Then late February happened, and the game changed.

The U.S.-Israeli conflict with Iran, which began on February 28, sent shockwaves through financial markets almost immediately. Just two days before the strikes began, the average 30-year fixed mortgage rate had dipped to 5.98%, the first time rates had been below 6% since 2022. That psychological milestone was a big deal for buyers who had been sitting on the sidelines. But Iran's effective disruption of the Strait of Hormuz — a shipping lane that carries roughly 20% of the world's oil supply — sent crude oil surging past $119 per barrel, stoking inflation fears and pushing Treasury yields sharply higher. When investors price in more inflation, mortgage rates follow.

By the last week of March, the average 30-year fixed rate had climbed to 6.38%, rising for the fourth consecutive week to levels not seen in more than six months — the largest single-week jump since the tariff turbulence of April 2025.

That said, let's keep some perspective here. Despite the recent climb, rates are still lower than they were a year ago, when the 30-year averaged above 6.6%. Home prices are rising, but more slowly than overall inflation. And wages continue to grow. This market is complicated, but it's not a disaster. Here's what's happening in different parts of the country.

The National Picture

The NAR's February 2026 existing home sales report showed a modest rebound — sales rose 1.7% to a seasonally adjusted annual rate of 4.09 million, with a national median sales price of $398,000 and 3.8 months of inventory on hand.

Home price growth is at its slowest pace since the post-Great Recession recovery began, according to the S&P Cotality Case-Shiller Index. That's a double-edged sword: buyers welcome the moderation, but some sellers are pulling listings hoping for better conditions down the road.

One encouraging sign: there are currently about 630,000 more home sellers than active buyers, according to Redfin — the biggest such gap in at least a decade. More options for buyers is a real shift from what we've seen over the past few years.

Pending home sales in February were down slightly from a year ago, and economists at Bright MLS noted that ongoing economic uncertainty, affordability constraints, and limited new listings were keeping some buyers on the sidelines heading into the spring season.

The Iran Factor: What It Means for Buyers and Sellers

Geopolitical shocks like this tend to hit mortgage rates and consumer sentiment hard, but they have less of a direct impact on underlying housing demand. People still need to move. Life events — job changes, growing families, retirements, divorces — don't pause for global conflict.

Bright MLS Chief Economist Lisa Sturtevant laid out two possible paths: if the conflict stays limited in duration and scope, higher energy prices and mortgage rates could be temporary, and the spring homebuying season might just get a delayed start. If it drags on, things get trickier.

The Federal Reserve held its benchmark rate steady at 3.50%–3.75% at its March meeting, raised its core inflation forecast for 2026 to 2.7%, and signaled only one possible rate cut this year — a stark reversal from earlier expectations of two or three cuts. I

The bottom line? Anyone telling you they know exactly where rates will be in 60 days is guessing. The Iran situation has too many moving parts.

A Look at the Regions

Northeast

The Northeast continues to be one of the stronger-performing regions in the country. Cities like Newark, NJ and Hartford, CT are seeing annual home price gains of over 6%, while the broader region remains a primary driver of national price growth. Supply shortages persist, which keeps upward pressure on prices even as other parts of the country soften. Buyers here face real competition on well-priced properties, and that isn't expected to change much in the near term.

North / Midwest

The North and Midwest are holding relatively steady. Chicago and Milwaukee continue to stand out for resilience, showing strength even as Sun Belt markets experience corrections in pricing and demand. This region benefits from more affordable baseline prices compared to coastal markets, which makes the rate increases somewhat more manageable for buyers working within a budget.

South

The South is a mixed bag right now. Month-over-month sales rose in the South in February, and it was one of only two regions to post year-over-year sales gains. But certain Sun Belt markets — particularly in Florida and Texas — are feeling the cooling effect of overbuilding and price corrections. Florida alone accounts for seven of the ten steepest annual home price declines in the country, with the North Port metro area down 6% from a year earlier.

Southeast

Outside of Florida's struggles, parts of the Southeast are holding up reasonably well. New Orleans is actually seeing price growth accelerate, bucking the broader Sun Belt trend and highlighting just how fractured regional markets have become. The Southeast's more affordable markets are drawing continued interest from relocating buyers, though the rate spike has put a dent in near-term buyer confidence across the board.

Southwest

The Southwest, particularly Arizona and Nevada, continues to see inventory rise and price growth slow. This region was among the hottest during the pandemic-era run-up, and it's now in a more deliberate cooldown. Buyers in these markets who are willing to negotiate are finding that sellers are increasingly open to concessions — whether that's a price reduction, help with closing costs, or credits toward repairs. There's real opportunity here for patient, prepared buyers.

West

California and the broader West Coast are navigating a challenging environment. Western markets are among those experiencing the most notable corrections in both pricing and demand, alongside Florida and parts of Texas. California's January 2026 closed sales came in at a seasonally adjusted annualized rate of 256,550, down more than 10% from December and slightly below year-ago levels. That said, premium properties in tight urban submarkets — think certain Bay Area zip codes and parts of LA — continue to attract serious buyers. The higher-end market has its own dynamics.

Northwest

The Pacific Northwest is showing some of the more encouraging signs heading into spring. In the Portland metro, new listings are up about 17% compared to this time last year, pushing inventory to just over three months — a meaningful improvement after years of thinly stocked shelves. Pending sales are up around 10% year over year, and buyers landing in the low-to-mid 6% mortgage rate range are still moving, though they're being more deliberate and negotiating harder than they were two years ago. Move-in-ready homes in desirable neighborhoods are still attracting multiple offers. Homes needing work are sitting longer — which creates opportunities for buyers willing to take on a project.

There's Always a Silver Lining

Mike Oddo, CEO of HouseJet, put it simply: "Every market shift looks like a wall when you're standing right in front of it. But when you step back and look at the whole picture, there's almost always a door somewhere in that wall. The buyers and sellers who do well are the ones who stop waiting for a perfect market and start looking for their specific opportunity within the market they actually have. The silver lining is always there. You just have to be willing to look for it."

He's right. Rates are higher than they were two months ago, but they're still lower than a year ago. Prices are moderating in many markets. Inventory is up. Sellers are offering concessions. Buyers who were completely frozen out during the peak frenzy years are finding deals that simply didn't exist before. That doesn't mean now is right for everyone — but it means the conversation is worth having.

HouseJet's Recommendation

Given everything going on — the Iran conflict, rate volatility, regional market divergences, and a Federal Reserve that's essentially in wait-and-see mode — this is not a time to be flying blind. At HouseJet, we strongly recommend working with top-tier professionals who track the real estate and mortgage industries as part of their everyday job. Not someone who checks rates once a week, but someone who lives in this data daily and can tell you what's happening right now, in your specific market, with your specific financial situation.

The right mortgage expert can help you understand your real options, explore loan products you may not have considered, and lock at the right moment. The right real estate agent brings ground-level knowledge that no data report can fully replace. Together, they can help you cut through the noise and make a decision you feel good about — whether that's buying, selling, or simply getting prepared so you're ready to move when the timing lines up.

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