Home sales off to a slow start in March as Iran war unfolds 

While it's hard to know if buyers and sellers are reacting to the war in Iran, high home prices or volatile mortgage rates, one thing is clear: The housing market is off to a quiet start this month.

Weekly numbers show slow pending sales and new listings, according to Redfin's latest market report. The four-week rolling average for signed contracts was down 2.8% year-over-year while new listings dropped 1.2%. Active inventory is also down 1.9% for the same period, the biggest drop in more than three years, the report indicated.

The sudden launch of hostilities in the Middle East over the weekend may be a contributing factor as buyers and sellers wait to see if it impacts the overall economy.

"Economic uncertainty is not a position from which many people are interested in making the largest purchase of their life, and the conflict in Iran just added to the anxiety pile that already included tariffs, last year's soft labor market, stock market volatility, and AI job loss concerns," said Joel Berner, a senior economist at Realtor.com.

What's happening with mortgage rates

In the days since the Iran incursion, 30-year mortgage rates have been somewhat volatile. After bouncing around Monday through Wednesday, Mortgage News Daily pegged the daily average at 6.13% on March 5, up from 5.99% at the end of last week.

That could put a damper on hopes that sub-6% rates would bring buyers back into the market — especially since rates may not reenter 5% territory this spring, according to Berner.

"For rates to continue their descent in 2026, we will need clear signals in the months to come that this conflict is not driving up prices for consumers at home," Berner said in an email. "Given the major jump in oil prices this week and the increased shipping costs that go with that, this positive news on inflation may be hard to come by."

Measured on a weekly basis, however, rates have remained fairly flat. The 30-year weekly average was 6% today, according to Freddie Mac, up slightly from last week's 5.98% — but still well below the 6.6%-6.7% averages seen a year ago.

Even if rates hold steady, other factors could suppress buyer activity, according to Bright MLS Chief Economist Lisa Sturtevant.

"Affordability is still a challenge and consumers are feeling anxious. Many buyers are going to be cautious as we enter the spring housing market," Sturtevant said.

Mortgage application activity ticks up

Last week's lower rates appeared to boost mortgage applications, according to the Mortgage Bankers Association. Overall activity for the week ending Feb. 27 was up 11%, while the seasonally adjusted purchase index was up 6.1% compared to the week before.

The rise in mortgage applications suggests borrowers are reacting to rate movement, said Kyle Bass, production business manager at Refi.com.

"While today's rates are not at the eye-popping lows of the pandemic, they remain at their lowest level in more than three years," Bass said.

Kara Ng, a senior economist at Zillow Home Loans, agreed, noting that overall buying power is up about $30,000 compared to a year ago — even with the rise in rates this week.

"Households that did not buy or refinance a home during the mortgage rate dip might have missed a flash sale, but can still buy at a discount," Ng said.

Sellers may be more flexible

Nearly 45,000 sellers who had delisted their homes last year relisted them in January — the highest number for that month in at least 10 years, according to Redfin.

Asad Khan, a senior economist at Redfin, expects those sellers to be more flexible on price "since they've already been burned once."

"Buyers shouldn't be shy about asking for concessions; even if the list price is high on paper, the seller may be open to negotiating," Khan said.