Mortgage rates hit their highest level since June 2025. Middle East attacks pushed oil prices up. The rates that were supposed to fall this year did not fall. Retail traders who refinanced in March based on a Bloomberg headline are now explaining to their spouses why they locked in at the wrong time.
The war with Iran ruined the forecast. Oil went up. Bonds sold off. Rates climbed. Every mortgage broker who sent out a "Rates are dropping, act now!" email in January is currently updating their LinkedIn profile to "seeking new opportunities in the financial services space."
Here's what happened: geopolitical tension in a region that controls global oil supply affected the price of oil. Oil prices influenced inflation expectations. Inflation expectations moved bond yields. Bond yields determine mortgage rates. This chain of events was unpredictable to everyone except the people who understand that literally everything is connected to oil and always has been.
Homebuyers who waited for lower rates got higher rates instead. The expectation was wrong. The forecast failed. The models broke. But at least they got to read seventeen think pieces about how the Federal Reserve would definitely cut rates four times this year. That comfort should keep them warm in the one-bedroom apartment they're still renting.
The technical analysis on mortgage rates is simple: they go up when bonds go down. Bonds go down when inflation goes up. Inflation goes up when oil goes up. Oil goes up when missiles fly. Missiles are flying. None of this required a doctorate in economics to predict, yet here we are, acting surprised.
The people who bought houses in June 2025 at the previous rate peak are finally feeling smart again. That feeling will last until rates go even higher next month when Iran does whatever Iran does next. At least oil traders are eating well while homebuyers refresh Zillow and pretend they're still just browsing.
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