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Homebuyers, builders grapple with rising prices amid war in Iran

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by Alicia Nieves - 05/04/26 11:10 AM ET

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by Alicia Nieves - 05/04/26 11:10 AM ET

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(NewsNation) – The conflict with Iran has become a new wildcard for American homebuyers already struggling with high prices and mortgage rates.

Despite the traditional spring selling season, the housing market appears to be slowing, with many families hesitant to commit to a mortgage. A recent Gallup poll found that only about one‑quarter of Americans who do not own a home expect to buy one within the next five years.

Existing home sales fell 3.6% in March to a seasonally adjusted annual rate of 3.98 million, the lowest level since June 2025. Even as sales soften, prices remain high, with the median existing‑home price at $408,000.

High mortgage rates and prices keep buyers on sidelines

Data from real estate firm Redfin show pending home sales declined 4.1% year over year in the four weeks ending April 12, marking the steepest drop in more than a year. Realtors say buyer activity, including home tours, is also notably weaker than last spring.

“The housing market is really impacted by the war in Iran through the financial markets,” said Jenna Stauffer, a real estate broker. “That influences oil prices, inflation expectations and ultimately mortgage rates.”

The slowdown signals more than a single weak month, raising broader concerns about buyer demand. And homebuyers aren’t the only ones feeling the strain.

As the war in Iran continues and oil prices climb, costs for transportation and building materials are increasing, squeezing homebuilders. The National Association of Home Builders reported that builder confidence fell four points to 34 in April, the lowest reading since September.

Builders squeezed by rising materials and transport costs

Even when buyers can find a home, affordability remains a hurdle. Builders eager to cut prices are facing rising costs of their own.

“Sixty‑two percent of builders are reporting a spike in building material costs,” Stauffer said. “That eventually trickles down to the consumer. You either see smaller footprints or higher home prices.”

For now, elevated interest rates, higher oil prices, inflation pressures and construction costs appear likely to keep the spring housing market on hold.

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