Two big things happened this week, and they're pulling your mortgage rate in opposite directions.

First, the good news. The US and Iran officially signed an agreement extending their ceasefire another 60 days, and it reopens the Strait of Hormuz, the waterway that roughly 20% of the world's oil passes through. Oil prices are already down about 20% from their peak.

Then, a few hours later, the Fed held interest rates steady, like everyone expected. But buried in their projections was a much less expected detail. They flipped their outlook from "maybe we cut rates this year" to "maybe we raise them instead," because most Fed officials still think inflation is a bigger risk than a slowing economy.

So in the same 24 hours, one piece of news should have pushed your mortgage rate down, and the other pushed back the other way. That's exactly why rates barely moved this week, even with a war cooling off.

Let's break down how we got here and what it actually means for you.

Back in late February, the US and Israel entered a conflict with Iran, as I’m sure you’re already very well aware. Almost immediately, oil markets reacted with the closure of the Strait of Hormuz. By May, inflation had climbed to 4.2% year over year, the highest reading since early 2023. For context, that number was just 2.4% back in January.

Most of that jump came from one place: energy. Gasoline was up over 40% year over year. Even electricity and natural gas bills climbed. When ResiClub crunched the numbers, energy alone was doing most of the heavy lifting in that inflation report.

Mortgage rates followed. On February 27, the average 30-year rate sat at a recent low of 5.99%. The next day, Iran's Supreme Leader was killed in a US-Israeli airstrike, and rates took off from there, climbing into the mid 6% range.

So that's the backstory that I’m sure you’re familiar with, but here's where it gets interesting.

On Wednesday, two things happened that both matter for your rate, and they point in opposite directions.

The good news: the US and Iran signed off on a 60-day extension of their ceasefire, and it specifically reopens the Strait of Hormuz. Oil has already dropped about 20% from its recent peak on the news. Less pressure on oil usually means less pressure on inflation, and less pressure on inflation usually means room for mortgage rates to ease.

The not so great news: that same day, the Federal Reserve held its policy meeting, the first one led by new Chair Kevin Warsh. They kept rates unchanged, which everyone expected. But their forward-looking projections also got more hawkish. Back in March, the Fed's own outlook still pointed toward one rate cut by the end of 2026. Now that outlook has flipped to a likely increase instead, and 17 of the 18 officials who weighed in said they see inflation risk tilted to the upside, not the downside.

Put plainly: the war easing up should help inflation cool off. The Fed signaling it might raise rates anyway works against that. Both of those forces hit the market on the very same day.

If you only heard "ceasefire," you might expect mortgage rates to fall right away. They have eased slightly off their mid-June peak, but they're still sitting well above where they were in February, and the Fed just made it harder for that trend to continue.

Even setting energy aside, inflation in categories that strip out food and energy (what economists call "supercore" inflation) is still running close to 3%, well above the Fed's 2% target. Inflation was sticky before the conflict even started, and it's still sticky now. Though, if we return to similar inflation levels we saw at the begining of this year, I would expect rates to come back down accordingly.

So this isn't a simple "war ends, rates drop" situation. It's two forces pulling at the same time, and right now they're roughly canceling each other out.

If you've been waiting for rates to fall before you buy, this week is a good reminder that the path down probably won't be a straight line. The ceasefire is genuinely good news for inflation longer term, but the Fed just told us not to expect quick relief.

That doesn't mean wait it out. It means the tools that work today (rate buydowns, seller-paid closing costs, builder incentives) matter more than where the headline mortgage rate sits. Builders have been offering some of the most aggressive incentives in over a decade to keep buyers moving, and that hasn't changed because of this week's news.

If you're house hunting right now, locking in a rate you can comfortably afford, rather than waiting for a number that may not show up soon, is usually the smarter move.

Rate volatility like this is exactly why pricing a home right on day one matters so much. When rates are bouncing around week to week, buyers' budgets are moving with them. A price that worked a month ago might be asking too much of today's buyer pool, especially after a week like this one.

I track every expired and failed listing across Utah and Salt Lake County, and the pattern holds up every single time: it's almost never the home. It's the price not matching the moment. In a market where the "moment" can shift because of news happening half a world away, that gap can open up fast.

If your home has been sitting, or you're getting ready to list, let's look at where your specific price point sits against what today's buyers can actually qualify for, not last month's.

Here to serve,

P.S. Curious where your home actually stands with rates moving the way they are? Reply with your address and I'll send you a custom market analysis showing your home's value, your equity position, and what's happening with buyer demand in your zip code right now. No strings attached.