March 2026 continues to be an unpleasant month for mortgage rates–a fact almost exclusively due to the Iran war. Even if the war were to end today, there’s been sufficient disruption to infrastructure and a big enough initial spike in energy prices to create what economists refer to as “second round effects.” In simpler terms, this means that inflation expectations and interest rates will not immediately return to February’s levels simply because the war is over.
That’s a premature conversation today when headlines regarding U.S. troop deployment caused rates to jump at 1pm ET. Many mortgage lenders repriced to higher levels after that with the average top tier 30yr fixed rate hitting 6.55% for the first time since August 2025.
Subsequent comments regarding de-escalation helped the bond market recover some of those initial losses, but the market would like to see a more ironclad announcement before reacting in a more meaningful way.