How the Iran war could crush the US housing recovery, and it's not just about mortgage rates
The US housing market is facing challenges due to the war with Iran, with rising mortgage rates and decreased affordability. The conflict has led to a decline in home sales and a rise in canceled contracts, giving buyers the upper hand in the market.
The war with Iran has impacted the US housing market, with mortgage rates rising to 6.5%. This has curtailed the expected improvement in affordability. Before the war, mortgage rates were falling, and home price gains were shrinking. The supply of houses for sale was also rising, favoring buyers. However, with rising interest rates, applications for mortgages to buy homes have dropped 5%. Zillow had forecast a 4.3% gain in sales of existing homes this year, but new uncertainty has emerged. The effects are already hitting the new construction market, with KB Home lowering its full-year forecast.
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