By Mike Bodeen · 2 March 2026
I had settled in my own mind this weekend about our current Phoenix Metro residential real estate market and the effect war with Iran will affect it. If a middle east war gives way to higher oil prices (and it’s likely), that will have a negative impact on inflation. If inflation increases, so will mortgage rates, which will have a negative impact on buyer affordability, which will decrease sales.
I am not one to use AI (Artificial Intelligence) to write my columns, though to be fair, most of what I have used AI for in various capacities has been mostly spot on – but not always.
“The combination of higher inventory and lower rates has sparked buyer enthusiasm. Will the enthusiasm continue or will it be short lived? Where is that crystal ball when you need it?”
Here is how AI responded to my question this morning: “What will war with Iran do to long term mortgage rates?”
War with Iran in 2026 likely threatens to push long-term mortgage rates higher due to inflationary pressures from rising oil prices and increased federal debt. While initial conflict might cause a brief “flight to safety” lowering yields temporarily, a prolonged war is expected to hinder Federal Reserve rate cuts and potentially raise costs for homebuyers.
So at 10am this morning I went to the Wall Street Journal and a front-page story was titled “Middle East Conflict Sparks Surge in Oil Prices.”
The 30 year mortgage rate last week dropped to just under 6% – a rate we’ve not seen for three years. In our business, we’re seeing increased buyer interest. The combination of higher inventory and lower rates has sparked buyer enthusiasm. Will the enthusiasm continue or will it be short lived? Where is that crystal ball when you need it?
What do we say? Well, our opinion is just one of many voices. And certainly, our business increases with more sales. But after our market has spent the last three years in the gutter, we welcome that for our clients and ourselves.
We say what we’ve been saying for a year or so now, that it’s a good time to buy a home. None, but One knows the future. Stability in owning a home is a good thing, and opportunity for buyers has not been better – for years!
The Cromford Report has introduced a new report that we’re liking, as it gives a good look at our Phoenix Metro market on a regional basis rather than the entire valley. The numbers below tells us how pricing has done in the past four years, by region:
Market data referenced in this article comes from The Cromford Report.