Signs of easing tension in the Middle East are helping calm oil markets and bond yields.

But according to Logan Motashami at Housing Wire, persistent inflation and a more hawkish federal reserve

could still keep mortgage rates higher than many investors hoped.

I'm Kathy Fedke, and this is Real Estate News for investors.

This is Real Estate News with Kathy Fedke.

There are growing signs that the Iran conflict may be cooling down.

Oil tankers are moving again through the Strait of Hormuz, which is easing fears about a major

disruption in global oil supply.

And that matters because rising oil prices

can fuel inflation, and inflation has a direct impact on mortgage rates. According to Logan

Motishami, the housing market has actually held up surprisingly well during this conflict. Even with

mortgage rates rising from around 6% earlier this year to as high as 6.7%, buyer demand

has remained relatively stable. One reason for that resilience has been mortgage spreads. That's the

difference between the 10-year treasury yield and the average 30-year mortgage rate. Logan says spreads have

been one of the biggest reasons mortgage rates did not move even

higher during the conflict. In fact, he says if mortgage spreads were as bad as they were in

2023, today's mortgage rates would be closer to 7.9 percent, instead of around 6.6% now. Even with

the recent geopolitical tension and tariff concerns, spreads only widened slightly,

but investors hoping for a quick drop in rates may need to stay patient. Logan says the bigger challenge

now is inflation and the Federal Reserve. Inflation data has stayed hotter than expected in

26, while labor market data has actually improved. That's causing

more Fed officials to take a hawkish tone on rates. Some investors are now even pricing in the

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