A lot has changed since January. Rates were falling, inventory was rising, and spring 2026 was shaping up to be the opening this market has needed for three years. Then February 28th happened — and if you’re trying to figure out what it actually means for your home, your equity, or your next move, that’s what I’ll break down.

By Jon Ritter · Ritter Mortgage Group · March 31st, 2026

Six weeks ago, mortgage rates dipped below 6% for the first time since September 2022. Inventory was up. Price growth had cooled. After three years of one of the most difficult housing markets in memory, buyers were finally getting some breathing room. Then the U.S. and Israel launched strikes on Iran, Iran closed the Strait of Hormuz, and oil crossed $100 a barrel. Mortgage rates have jumped the worst they have since the beginning of the inflation scare three years ago and have been on the rocks since.

To make sense of this spring’s market, you need to understand four forces pressing on home values right now — each with real dollar consequences, and each landing differently depending on whether you’re buying, selling, holding, or refinancing.

FORCE ONE

The Rate Picture Just Got Reset

Mortgage rates are usually in lockstep with 10-year Treasury yields. Since Treasury valuation depends on inflation expectations, and oil is a principal driver of inflation, rates are being directly and strongly impacted by the Iran’s control over the Strait of Hormuz.

The Strait of Hormuz handles roughly one-fifth of the world’s daily oil supply. With it blocked, oil stayed above $100 a barrel through most of March. That pushed inflation fears back into bond markets, yields rose, and mortgage rates followed — from 5.875% on February 26 to 6.38% as of last week, the highest in six months.

• 5.875% — 30-yr rate two days before the war began
• 6.375% — 30-yr rate today, after four straight weeks of increases
• ~$240 — additional monthly payment on a $400K loan at today’s rate vs. six weeks ago
• 74% — market odds the Fed holds rates unchanged through December

The Fed is caught between two bad options. Cut rates and risk stoking oil-driven inflation. Hold rates and keep mortgage costs elevated while the job market weakens. Fed Chair Powell said publicly in mid-March: “Nobody knows. The economic effects could be bigger, they could be smaller.” Markets have priced in no cuts for the rest of the year.

The rate picture from here is genuinely binary. If the Strait reopens and oil retreats, rates follow. If the conflict extends through summer, rates stay elevated or climb further. The timeline of the conflict is the single biggest variable — and nobody controls it from a desk in the U.S.

FORCE TWO

The Dollar Has Been Weakening — and It’s Showing Up in Real Estate

The U.S. dollar fell nearly 10% in 2025 — its worst year since the early 1970s. That trend is continuing. It matters to real estate in three specific ways.

1. Construction costs go up. Steel, copper, lumber, and building materials are priced globally. When the dollar weakens, those materials cost more in dollar terms even when global prices are flat. Builders pass that cost along. New construction stays expensive, which limits supply — and limited supply continues to put a floor under existing home prices. That is a net positive for current homeowners but not for those hoping the market would loosen up.
2. Foreign buyers get more purchasing power. A weaker dollar means a British, Canadian, or European as well as other countries like China and Turkey buyers can purchase significantly more American home with the same amount of their own currency than two years ago. The NAR recently reported that British nationals appeared on the top-five foreign buyer list for the first time in years — a direct result of the currency shift. Foreign cash buyers, who are largely indifferent to mortgage rates, provide real support for home values, especially in larger metro markets.
3. The more significant signal. The dollar weakens when global confidence in U.S. fiscal management softens. That reduced confidence tends to push Treasury yields higher — which puts upward pressure on mortgage rates. The dollar’s decline and elevated mortgage rates are connected at the root.

RSM chief economist Joe Brusuelas describes what’s underway as a multi-year secular bear market for the dollar, driven by investors diversifying away from U.S.-denominated assets. The dollar is the world’s reserve currency — but that status requires our market to stay solid internationally.

FORCE THREE

AI and the Jobs Market: The Tension Underneath Everything

Before the Iran conflict, the U.S. economy was already showing strain. The country added just 181,000 total jobs in 2025, revised down from 584,000 — the lowest number of jobs created outside a recession since 2002. February 2026’s report was worse: a net loss of 92,000 jobs against forecasts of a 60,000 gain.

Some of that is AI-driven. Amazon eliminated 16,000 roles in January, citing automation. Nearly 55,000 layoffs in 2025 were directly attributed to AI, per Challenger, Gray & Christmas. MIT researchers put 11.7% of current jobs within reach of automation using technology that already exists.

Economists disagree on whether this is a disruption or a permanent shift. The optimists point out that blue-collar, trade, and construction work — the jobs most connected to housing — are highly resistant to automation. The skeptics point out that workers displaced from white-collar roles don’t automatically transition into those trades. What both sides agree on: employment uncertainty is suppressing the long-horizon financial confidence that leads people to buy homes. That’s a real drag on demand, entirely separate from rates.

THE REAL PRESSURE

Here’s what all of this adds up to in daily life. Gas prices are up 32% since late February. Grocery costs are climbing again. Stock portfolios have declined for four straight weeks. The spring housing market — which economists had counted on to be the best in three years — has stalled.

That squeeze is not evenly distributed. Higher-income households with strong equity positions have options. First-time buyers and those with thinner margins are feeling every basis point. The uncertainty itself carries a cost — not just in dollars, but in decisions deferred and plans put on hold.