Mortgage Rates Continue to Climb on Oil Spike and Iran Tensions
March 13, 2026
Mortgage markets are experiencing heightened volatility this week as geopolitical tensions escalate. Bonds have weakened significantly, leading to upward pressure on rates. Key data releases and upcoming Fed decisions are keeping investors on edge.
Bonds sold off sharply due to rising oil prices from Iran escalations in the Strait of Hormuz, overshadowing tame CPI data that matched expectations. A poorly received 10-year auction exacerbated the sell-off, with mortgage bonds off notably and MBS movement showing further weakening. Tomorrow's Core PCE inflation data, along with GDP revisions and other releases, looms large ahead of next week's Fed meeting. This combination has driven rates higher by a quarter to half a point in recent sessions. Float/lock guidance recommends locking for 7, 15, and 30-day scenarios, while considering a float for 30+ days.
With no recent mortgage news or housing inventory data available, the focus remains on broader affordability challenges amid rising rates. Elevated oil prices are stoking inflation fears, which could prolong higher borrowing costs. Homebuyers are navigating a market where rate volatility impacts monthly payments and purchasing power. Sellers may face slower demand if affordability continues to strain.