Mortgage rates jump sharply higher after Iran strikes, reversing last week's decline

March 2, 2026 - 21:40

Average mortgage rates experienced a sharp increase to start the week, abruptly reversing the modest decline recorded just days prior. The sudden jump is directly attributed to escalating geopolitical instability following military strikes in the Middle East.

The development triggered a swift reaction in global financial markets, leading to a spike in oil prices over supply concerns. This inflationary pressure caused investors to sell off U.S. Treasury bonds, which in turn drove yields higher. Since mortgage lenders typically use the benchmark 10-year Treasury yield as a guide for setting long-term loan rates, the movement translated directly into increased borrowing costs for homebuyers and those seeking to refinance.

Industry experts note that the volatility underscores how sensitive the housing market is to international events. The rapid increase has stalled the recent momentum of favorable rate trends, placing additional strain on affordability for potential buyers. Market analysts are now closely watching for further developments, which will likely dictate whether rates stabilize or continue their upward trajectory in the coming days.