Mortgage Rates Climb on Iran Tensions Despite Tame CPI
March 12, 2026
Mortgage markets opened lower this Thursday, March 12, 2026, as fresh tensions in the Strait of Hormuz overshadowed otherwise tame inflation data. Geopolitical risks are driving oil prices higher and stoking inflation concerns, leading to a notable uptick in rates. Homebuyers should stay informed amid this uncertainty.
Bonds sold off sharply today despite CPI figures aligning with expectations, featuring a 0.3% monthly headline increase and 0.2% core rise. Escalating Iran conflicts have dominated sentiment, pushing mortgage rates higher by a quarter to nearly half a point. MBS prices dipped by 6 basis points, reflecting the broader risk-off tone. Yesterday's rally faded early, with markets yielding back gains from falling oil and de-escalation hopes.
Existing Home Sales recently exceeded expectations, signaling resilient buyer demand despite elevated rates. However, this positive data had minimal market impact as bonds continued their sell-off. Affordability remains challenged with rates trending upward, compressing purchasing power for many households. Housing inventory trends are unavailable, but the sales beat underscores ongoing market dynamics.