Five weeks ago, mortgage rates dropped below 6% for the first time since 2022. If you were shopping for a home in late February, you could feel the momentum. Rates at 5.99%, inventory rising, and real wages finally outpacing inflation. Affordability was finally starting to improve after years of pain.

Then on February 28, the U.S. and Israel launched strikes on Iran. And the housing market's trajectory shifted quickly.

Here's the chain reaction, as simply as I can put it:

War breaks out, and Oil prices spike (up 25% since the conflict started). Investors get nervous about inflation coming back, so they sell bonds which causes treasury yields to shoot up, and mortgage rates follow right behind.

The 30-year fixed rate mortgage went from 5.99% on February 27 to 6.46% as of this week, according to Freddie Mac. That's the fifth straight week of increases and the highest rates have been since September.

That's the headline. But the headline doesn't tell the whole story. So let me tell you what's actually happening on the ground here in Utah, plus some good news that you won’t find in the national news.

On a $550,000 home with 10% down, that jump from 5.99% to 6.46% adds about $145 to your monthly payment.

According to Zillow's senior economist, today's higher rates have already wiped out about 30% of the affordability gains buyers had built up earlier this year.

That sounds rough. But here's what that math doesn't account for: almost nobody I'm working with right now is paying 6.46%.

Between builder rate buy-downs, seller concessions, and lender credits, the buyers I'm working with are locking in rates that are sometimes a full 2% to 2.5% below the published rate. That means effective rates in the low-to-mid 4% range on some new construction deals, and high 4s to low 5s on resale homes where we negotiate seller-paid mortgage rate buy-downs into the contract.

The published rate is the starting point. It's not the finish line. And the gap between those two numbers is where having the right strategy (and the right agent) makes a real difference.

KB Home, one of the nation's largest homebuilders, just reported first quarter revenue down 23% year over year. They cut their full-year delivery forecast and pointed directly to the Iran conflict as a factor weakening buyer demand. Net income dropped from $109.6 million a year ago to $33.4 million.

But the longer-term story is what oil prices could do to the cost of building a home. Oil isn't just fuel. It's baked into roofing shingles, PVC pipes, insulation, adhesives, sealants, paint, and vinyl siding. Higher fuel costs also raise transportation expenses for materials and equipment, and push up development costs for earthmoving and heavy machinery.

KB Home CEO Robert McGibney said on their March 24 earnings call that petroleum is involved in many of the products that go into a home, and that higher oil prices could eventually work their way into both land development and construction costs. He said those increases haven't shown up yet, and their construction costs are actually down 8% year over year right now. But if oil stays elevated, that relief could reverse.

Their margins tell the story of a builder under pressure. KB Home's housing gross profit margin fell to 15.3% in Q1 2026, the lowest first quarter level since 2017, down from a peak of 22.4% in Q1 2021.

Layer on the 15% global tariff that went into effect in early March, and builders are getting squeezed from two directions.

Here's why this matters to you: when builders are under pressure, they get more flexible. And that's exactly what's happening right now.

Not every builder is handling this the same way, and understanding the difference matters if you're shopping.

KB Home has leaned into outright price cuts. Their average selling price dropped to $452,100 in Q1 2026, down 9.7% from a year ago and 11.4% below their 2022 peak. They've cut prices in markets like Austin, San Antonio, Orlando, and Jacksonville.

Lennar, the nation's second-largest builder, has taken a different approach. Instead of cutting sticker prices, they've gone heavy on incentives like mortgage rate buy-downs and closing cost credits, spending an average of $62,700 per home on incentives last year, up from $17,300 in 2022.

Here in Utah, we're seeing both strategies play out. Builders like Richmond American, DR Horton, Edge Homes, and many others are offering rate buy-downs, closing cost assistance, design upgrades, and in some cases reduced base prices. While other builders like Salisbury tend to offer the lowest price possible without any incentives.

I'm actively tracking which builders in which communities are offering the best packages right now, and that's something I walk my buyers through before we even start looking.

The bottom line: builders need to move inventory. That gives new construction buyers real leverage, and it's leverage that most people don't realize they have unless someone shows them. And those same advantages tend to trickle down to pre-existing homes too as home sellers look to compete with home builders.

I know the rate headlines feel discouraging if you're thinking about selling. Higher rates mean fewer buyers, right?

Not exactly. Here's what I'm seeing:

Serious buyers are still buying. The people who paused were mostly on the fence already. The buyers actively shopping right now are motivated, pre-approved, and ready to move. They've already factored in today's rates and made peace with them. Those are the best buyers to sell to.

Your equity position is strong. If you've owned your home for more than 4-5 years in Utah, you're likely sitting on significant equity. Even with the market normalizing, Utah homeowners who bought before 2023 have seen substantial appreciation. That equity gives you options, whether you're moving up, downsizing, or relocating.

Fewer sellers are listing, which helps you. The same rate environment that makes some buyers cautious is also keeping a lot of would-be sellers on the sidelines (the "lock-in effect" of not wanting to give up a low rate). That means if you do list, whlie inventory is building, you're still facing less competition from other sellers than you might expect if rates were lower.

Strategy matters more than ever, and that's where I come in. In a market like this, the difference between a home that sells in 30 days and one that sits for 120 days usually comes down to pricing strategy, presentation, and marketing. I track every expired and failed listing in Utah, and the pattern is clear: the homes that don't sell are almost always priced for 2022, not 2026. The homes that are priced right, staged well, and marketed aggressively are still getting offers.

If you're considering a move, don't let the headlines scare you off. Let's look at your actual numbers together and see what makes sense.

Here's what gives me confidence about where we're headed:

Rates are still lower than they were a year ago. In April 2025, the 30-year averaged 6.64%. We're below that today, even after the spike.

If the conflict de-escalates, rates could come back down quickly. There were even reports this week of a potential U.S. peace proposal, and bond yields dipped on the news. Zillow's economists noted that a resolution soon would leave plenty of time for catch-up activity this spring.

Utah's fundamentals haven't changed. We're still adding jobs. Population is still growing through organic demand, not pandemic-era migration that's drying up in other states. That's the foundation that supports our market long term, regardless of what happens with oil prices or geopolitics in the short term.

And most importantly: markets like this reward people who are prepared. Buyers who know how to find the incentives and negotiate effectively are getting great deals right now. Sellers who price correctly and work with an agent who understands the data are still getting their homes sold.

This isn't a market to fear. It's a market to navigate. And that's exactly what I help my clients do every single day.

Here to serve,

P.S. Whether you're buying or selling, the next move starts with knowing your numbers. Reply with your address and I'll put together a custom market analysis showing exactly where you stand, what your home is worth, or what your buying power looks like with today's best available rates and incentives. No strings attached.