Iran war upends spring housing market

We’re back, baby!

We took a short hiatus over the past two weeks to retool and lock in some new partnerships — you'll see the results in the weeks ahead. Going forward, we'll be in your inbox every Wednesday and Friday.

But these two weeks away felt like two years, given everything that's happened — a war reshaping the housing market, mortgage rates jumping half a point almost overnight, and a spring season that came in strong and hit a wall. 

There's a lot to unpack, and we’re itching to get back into the thick of it all. 

Let’s go!

- David

How the Iran war is upending the spring housing market

The spring housing market is losing momentum as the risks and uncertainty caused by the Iran war reshape buyer behavior. CNBC’s latest housing survey, conducted between March 24 and March 30, shows that while the year started with expectations of a strong rebound, the escalation of the Iran conflict – primarily through its impact on mortgage rates and economic uncertainty – is now causing buyers to hesitate and, in many cases, step back entirely.

Here are the key takeaways:

• Mortgage rates spiked quickly — The average 30-year fixed rate jumped from roughly 5.9% to around 6.5% following the escalation, erasing the affordability gains that had been fueling early spring demand. (Mortgage News Daily)

• Buyers are pulling back — About 19% of prospective homebuyers have paused their search entirely, while 55% delayed their purchases due to the conflict and broader economic uncertainty.

• Uncertainty is now the main constraint — It’s not just rates; concerns around inflation, job security, and market stability are weighing on decision-making, making buyers more cautious even if they remain financially qualified.

• Spring momentum is fading — What was shaping up to be a strong season is now slowing, with fewer showings, softer demand, and more hesitation at the contract stage.

• Sellers may need to adjust expectations — As demand cools and homes sit longer, pricing power is weakening, increasing the likelihood of price cuts and concessions as the market recalibrates.

My take

The CNBC survey puts a number on what agents are already feeling in the field: this spring had real momentum, and the Iran war disrupted it. Mortgage rates jumped nearly half a point, but the bigger issue is what’s happening in buyers’ heads — war, inflation, job security. Those aren’t spreadsheet problems; they’re emotional ones, and they’re much harder to solve. The market isn’t broken, but it is rattled, and rattled markets don’t respond to louder sales pitches — they require steadier hands.  Scroll down to today's Foundation Plans because that’s exactly what we discuss: helping you become the calm, grounded presence your clients need when uncertainty starts driving the conversation.

Pending sales surged in March

Despite the spike in mortgage rates, housing demand showed surprising resilience in March. According to Zillow’s latest market report, newly pending sales climbed to 281,546. That’s an increase of 4.6% year-over-year and 29.8% month-over-month and is the second-highest pending listings total since August 2022.  Here are the other key takeaways from the March update:

• Mortgage rates: Rose from ~5.98% to 6.38% during the month (Freddie Mac) 

• Home values: +0.8% YoY nationally (Zillow Home Value Index)

• Inventory: Increased year-over-year for the 28th consecutive month, with 1.23 million homes for sale nationwide

• Time on market: Homes took a median of 19 days to go pending in March, two days longer than a year earlier and nine days shorter than February.

• Sales: 300,398 homes were sold in March, according to Zillow’s preliminary count — up 3.7% YoY and 25.2% from February (figures subject to revision)

• Rents: The typical rent nationwide is $1,910 — up 1.8% YoY and 0.6% MoM

My take

Zillow’s March numbers — surging pending sales, modest price growth, and 28 consecutive months of rising inventory — might seem to cut against the story we just told about the Iran war upending the spring market. But they don’t. Zillow is showing you what the market looked like just before things shifted: a brief window when mortgage rates dipped below 6%, and buyer confidence hadn’t yet been rattled by the war or its economic ripple effects. Housing moves with a lag, so March contracts reflect momentum already in motion — not the hesitation that’s since taken hold. Think of it less as a contradiction and more as a handoff: Zillow shows the market’s strength coming into spring; CNBC shows the pressure now building.

Markets where home-flipping returns improved the most

As home prices hit record highs in 2025, flipping activity slowed and profit margins compressed, according to ATTOM’s latest investor update. Here’s the breakdown:

• Investors flipped 297,045 homes nationwide, the lowest annual total since 2020 

• Flips accounted for 7.4% of all home sales

• Median gross profit fell to $65,981, down from $77,000 in 2024

• Typical ROI dropped to 25.5%, down 7.4 percentage points from 2024, and the lowest level since 2008

Despite profit margins shrinking nationally, several smaller markets saw sharp increases in ROI, driven by lower acquisition costs and localized pricing strength.

Here are the top 5 markets by ROI growth (2024 vs 2025):

1. Peoria, IL: 61.2% in 2024 → 91.4% in 2025

2. Huntington, WV: 50.6% → 77.2%

3. Lake Charles, LA: 121.3% → 146.2%

4. Cedar Rapids, IA: 29.7% → 49.6%

5. Tuscaloosa, AL: 9.3% → 26.4%

My take

Even in a tough year like 2025, nearly 300,000 homes still got flipped. That's the point: deals don't disappear – they concentrate. When profits get squeezed, casual investors fall away, leaving a smaller group of serious operators who move fast, decide quickly, and keep transacting regardless of conditions. The agents who win aren't chasing the broader market; they're identifying these players, building relationships with them, and helping them execute repeatedly. If you want stability, stop waiting for better conditions. Instead, align yourself with the people who transact. Study who’s doing deals in your market. Get in front of them and position yourself as someone who makes their business easier. Stop acting like an order taker. Start acting like a dealmaker.

Schematics

The news that just missed the cut

• These are the top real estate brokerages in the U.S.

• What to say when a buyer wants to back out

• Learn how Shelton Wilder closed a $41M deal without chasing clients 

• Use this to build your pipeline this spring

• How Shark Tank investor Robert Herjavec built a $200M property empire

Foundation Plans

Advice from David to win the day

Let’s do some level setting today.  

We came into 2026 thinking this would be a strong spring: mortgage rates easing, pent-up demand showing up, buyers getting off the sidelines. The Iran war upended all of that.  As we noted up top, mortgage rates jumped from around 5.9% to 6.5%, and nearly 1 in 5 buyers (19%) are now stepping back entirely. 

More importantly, buyers aren’t just focused on price anymore; they’re focused on uncertainty: rates, inflation, job security. As a result, even though financial markets are surging because of the provisional ceasefire brokered yesterday, most buyers are hesitating.

But let’s be clear: this isn’t a dead market. It’s just a nervous one. And in nervous markets, your role as an agent shifts. You’re not just facilitating transactions – you’re steadying people. Here are some tips on how to do that.

1. Start by acknowledging what your clients are feeling – Don’t try to talk clients out of their concerns. They’re watching the same headlines you are. If anything, just say it plainly: “Yeah, there’s more uncertainty right now.” Then guide them back to what they can control – budget, timing, and what they actually need.

2. Bring the conversation back to their life – The mistake is letting the entire decision revolve around rates or geopolitics. Gently pull it back: “Does this move still make sense for you over the next few years?” Most real estate decisions aren’t about perfectly timing the market; they’re about what’s important in their life. 

3. Help your clients see the opportunities in the uncertainty – If 19% of buyers are stepping out, that means less competition. More room to negotiate. More chances at concessions. This is where you reframe the moment: uncertainty isn’t just a risk; it can be an advantage if you move correctly.

4. Slow things down and create structure – When people get nervous, they either freeze or rush. Your job is to set a calm pace: next steps, timelines, decision points. The more clarity you provide, the more confident they’ll feel moving forward.

5. Stay close and communicate more than you think you need to – When people are nervous, silence makes everything feel worse. Check in. Share updates. Explain what you’re seeing. This is where you become more than an agent. You become a steady presence. Be the lighthouse in the storm.

The agents who do well here aren’t the loudest or the most aggressive. They’re the ones who make their clients feel like they’re in good hands, no matter what’s happening around them. 

We’ll be sharing more in the upcoming editions, but in the meantime, drop us a line. Tell us what you’re seeing out there.

Just in Case

Keep the latest industry data in your back pocket with today’s mortgage rates:

“You’ve gotta keep control of your time, and you can’t unless you say no. You can’t let people set your agenda in life.” — Warren Buffett

Never have these words felt more relevant. Don’t let events or other people set your agenda. Stay ruthlessly focused on your goals, friends. Your time is limited, and you only get one life. Make the most of it.

Have a wonderful week. We’ll see you back here on Friday!

- David