Name: Iran war hikes US costs of mortgages, flights, groceries & more
Uploaded: 2026-03-14T21:32:33.000Z
Duration: 10 min 53 s
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People who are hoping to buy a home may be set back by the climbing mortgage rates.

Adverbs of degree

30 year fixed mortgage increased to 6.11% for the week that just ended on Friday.

For context, the rate was just under 6% two weeks ago.

That was something that had not happened since 2022.

With me now, Joel Berner, senior economist@realtor.com Joel, good morning to you.

The inflationary pressure that's created by this war is uni.

As I understand it, in geopolitical crises, these rates come down, people move toward purchasing homes as a safe investment.

What should we expect to see in the near term?

What we would expect to see normally is the safe haven effect, where volatility in the stock market leads people to invest in bonds instead and those interest rates come down.

But what's happening here is that the inflationary expectations are a stronger effect on the interest rate market than that safe haven effect.

We expect that this war is going to increase prices in the future.

And as prices in the future make money less valuable in the future, money today, like money for buying a home, becomes more expensive.

And so mortgage rates go up and we would have had a really great spring buying season with mortgage rates dipping below 6% for the first time in a couple years.

But now we've seen all of those gains go to waste.

And we're in a situation where buying a home now is still advantageous compared to last year, but

We were hoping for a really strong spring buying season in 2026.

We've got the numbers up and control room keep them up because that interest rate, 6.7% this time a year ago, as I said a moment ago, 6.11%.

Now with the week that just ended yesterday, what do you say to people who have been sitting on the sidelines because of tariffs, because of inflation and jobs numbers when they look ahead to the spring buying season?

Yeah, we still think it's a good time to buy.

We say that there are all the signs pointing in the right direction for buyers.

Mortgage rates, though going up in the short term are still better than they were last year.

So Overall affordability in 2026 looks better than it did in 2025 and 2024.

And the last two years had some of the lowest numbers of existing home sales we've seen since the mid-90s.

And so we're really expecting a rebound in 2026.

And now may be the time for those on the sidelines to really look for a home that meets their needs because inventory is starting to expand as people decide to move in advance of the summer moving season.

And before mortgage rates go up any further, this could be a really good time to get off the sidelines.

So there was this decision from a judge yesterday to toss the Justice Department subpoenas for a federal grand jury for Jerome Powell, the Federal Reserve chair.

The President has consistently pressured Powell to lower interest rates.

I wonder, is the real estate market expecting changes, pricing in changes, or forecasting what will happen once this Fed chair's term is up in a couple of months?

We really don't anticipate a lot of change from the Fed.

They're really in a tough position right now, staring down the barrel of stagflation.

We just saw GDP numbers from the fourth quarter of 2025 get revised down, and

we have inflation numbers a little bit above expectations even before these wartime changes get priced in.

So we don't see a situation in which the Fed is likely to cut or at least in a responsible way.

So even the changeover in leadership there, they're in such a tough position that we're not pricing in or expecting any rate cuts for the next several months.

As far as we can foresee the impact of this conflict.

You brought up the S word stagflation, where inflation stays high, job growth is low, unemployment growth.

I wonder is, is this environment more likely more fertile for stagflation over the next several quarters?

The oil shock is really the scary bit there.

I'm not calling for anything to happen or for us to see stagflation necessarily, but

it's the type of the thing that the Fed is thinking about and doing everything they can to prevent.

So really, you know, just the external shock of oil prices being so high, that's something that makes its way throughout the whole economy because as everything needs to be shipped, it makes its way into the price of every physical good in the economy.

So if we were talking about things in a vacuum, it would be a little bit less worrying.

But that oil shock certainly harkens back to some historical precedent and some scary uses of the S word.

Thank you, Joe Berner, senior economist@realtor.com I appreciate your time.

Jet fuel prices going up from about $2.50 a gallon a few weeks ago to nearly $4 a gallon today, a jump of almost 60% since the war began with Iran.

The price jumps after strikes on oil facilities, growing pressure on supply routes and trouble moving oil through the Strait of Hormuz.

Fuel is one of the biggest costs for airlines, which is why airfares are expected to rise.

Joining me now, aviation reporter Sean Cudahy from the Points guy.

Argus has a gallon of jet fuel, the average at 250 a gallon a day before the war was started, 399 at the at the end of the week on Friday.

Does a ticket that someone books today reflect that increase in cost or has the the airline yet to pass that on?

Well, good morning, and I think increasingly it is reflecting that cost.

We saw some reports out from Wall street analysts late this past week in the last 48 hours or so that show that ticket prices, if you're looking about three weeks out for booking, have already risen pretty sharply.

We've seen pretty solid increases, whether you're talking about transatlantic flights to Europe, transcontinental flights, coast to coast routes in the US but really just across the board, whether you're going to the Caribbean or on something kind short haul domestic, we are definitely starting to see higher prices.

And we expect at this point, talking with global supply chain experts I've spoken with this week, the expectation is that this is going to plague travelers as they go to book summer flights.

So we are certainly advising folks to go ahead and get those summer trips locked in if you're planning to fly.

Is that for international flights and domestic flights?

Typically, we will advise that you book international farther out than domestic.

But I think at this point, especially if you're trying to travel in June or July, which are really, they've really become kind of the two peak months of summer if you're planning to fly in those months, I would go ahead and get your trip locked in right now, today, even if it's a domestic trip, keep in mind, as long as you don't book basic economy, the cheapest fares that a lot of airlines offer with a lot of restrictions.

If you book just a normal ticket, you should be able to go back and later change your ticket, your booking if the price eventually does drop.

At this point, obviously, though, we don't really know what's going to happen with pricing, but

it certainly looks like it's only going up at this point.

So, Sean, we've been reporting this morning and obviously now for the last two weeks about some of the air travel issues in the region.

Of course, you've got Emirates and Qatar and Etihad as well with those hubs in Dubai and Abu Dhabi and Doha.

If people have flights booked on those, should they reconsider?

Yeah, I think it's definitely worth a second thought at this point.

I mean, you heard the report from Dohan just a couple minutes ago there.

It's really kind of touch and go and it's such a fast developing situation.

We've seen airlines, American Airlines also flies to the region and they've issued their travel advisory that gives travelers basically flexibility to make ticket changes.

That's now extended out through the end of May.

So really kind of getting into the summer season there.

I think that, you know, it's just, it's so uncertain what's going to happen from one day to the next.

So, you know, the concern of kind of getting stuck somewhere and not being able to get back.

I had family, friends that were trying to get back from India through Dubai.

It took them a while to connect back to the US that's just kind of the reality for a lot of travelers right now.

Yes, we're starting to see more flights than we were, you know, a week or two ago.

But, you know, it's certainly not, you know, completely reliable at this point that you'll be able to get to your destination.

How long, Sean, is, is the tail of supply disruption?

Let's say, you know, the Strait of Hormuz essentially shut down because the attacks from Iran right now.

But if that reopens and traffic resumes, let's say April 1, how long does the airline expect that that will have an impact on their jet fuel prices?

And of course, the price passed on to the passenger.

Historically, we've heard airlines say it can take a couple months, the tail, to use that word, therefore the oil prices to affect fares.

But we've definitely seen a much faster adjustment from airlines when it comes to fares going up.

I don't expect fares to go down today or tomorrow, but

certainly if things were to open up again, you know, you would expect that eventually or you'd hope at least that fares would come down eventually.

I think that's why, you know, if you are booking, you know, a trip today for the summer and, you know, things do eventually improve or fares go down for some other reason, you know, to give yourself kind of that out, that flexibility to go in and kind of capture that lower price point.

I think that's really sort of the best, your best bet at this point.

All right, Sean Cudahy says act now if you're traveling this summer, domestically or internationally.

Aviation reporter from the Points Guy, thanks so much.

She said that Americans voted for the president to help the affordability crisis and that the president should focus on that.