Mortgage Rates Climb on Iran Tensions , March 25 Update
March 25, 2026
Mortgage markets faced headwinds this Wednesday, March 25, 2026, with bonds opening lower due to escalating Iran-Israel tensions. Yesterday's rally vanished as headlines sparked a selloff, pushing yields higher and MBS prices down notably. Geopolitical uncertainty now overshadows a light economic calendar this week.
The biggest story driving today's action is renewed Middle East escalation, including Iran strike headlines and concerns over the Strait of Hormuz. Bond prices fell sharply, with the 10-year yield climbing and MBS dropping amid the risk-off sentiment. Mortgage rates moved higher by a meaningful margin as a result. Weak productivity data took a backseat to these global risks. A quiet week for economic releases keeps the focus squarely on headlines for potential swings.
Rising mortgage rates continue to pressure housing affordability in an already challenging environment. With monthly payments trending upward, prospective buyers face reduced purchasing power amid ongoing market dynamics. Inventory trends remain uncertain, but higher rates could further slow momentum. Sellers may encounter softer demand as affordability constraints limit the buyer pool. This week's light data calendar amplifies the impact of rate volatility on home financing costs.