Continued tensions with Iran have generated sticker shock at gas pumps, raised inflation concerns and added to the uncertainty in already volatile markets.
According to a Marcus & Millichap brief, instability and confusion are also impacting U.S. housing, at least in the short term.
For one thing, mortgage rates are increasing. The Wall Street Journal reported that, as of April 2, an average 30-year fixed rate stood at 6.57%, a six-month high.
The question is whether—and how—Middle East geopolitical tensions might impact the U.S. housing market.
Supply (Growing) and Demand (Muted)
Marcus & Millichap said that existing-home inventory in February 2026 (the latest metrics available) reached its highest level since 2020. While this is putting the brakes on home price growth, higher mortgage rates could dampen homeowner interest.
Whether mortgages remain more costly depends on the duration of oil price increases. Higher pump prices could lead to higher-for-longer interest rates and a pull-back from potential homebuyers.
Construction Bifurcation
Construction trends diverge by housing type. For example:
- Single-family completions have been steady
- Multifamily completions reached their lowest levels since the late 1980s
Additionally, building materials increased by 7% year over year in February. Higher oil prices could mean less construction, which could potentially “slow housing starts and the possibility of project delays,” the brief said.
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