The War Has Changed the Housing Market | April 2026 Update

**Dave Meyer** (0:00)
How is the war in Iran affecting the housing market? I've been saying for years that a black swan event can always dramatically shift real estate dynamics. Well, here it is. In the last month, the war has reshaped the trajectory of mortgage rates, inflation, consumer sentiment, and more. And of course, all of these factors will impact home values. And spoiler alert, the impact is probably not good. But that doesn't mean you can't invest right now. In fact, some of the best times to build your portfolio are when all of the headlines about housing are negative. You just need to adjust your buy box for a changing market. You're probably going to see better properties become available. Sellers will even be more willing to negotiate. And other buyers are probably going to be scared off. And in today's April 2026 housing market update, I'll explain how you should be shifting your strategy to take advantage of these shifting market conditions.
Hey, what's going on, everyone? It's Dave Meyer, Chief Investment Officer at Bigger Pockets, housing market analyst, real estate investor of 16 years now. Today in the show, we're going to talk a little bit more about current events than we normally do, and we're going to specifically be focusing on how the war in Iran is impacting the housing market. So let me just get to the point. The war in Iran is likely going to have negative implications for the housing market. Now, I'm not saying a crash, and we'll talk about that in a minute. But if you look at what has happened in just the last month, I think we are going to see slower home sales. We're going to see mortgage rates up. We've already seen them go up a half a point, and I think they're going to stay elevated. And I think we're probably likely going to see reverses in affordability and reverses in demand. Now, that does not mean that there's a disaster. And actually, as we're going to talk about towards the end of this episode, that could spell really good buying opportunities for real estate investors. But I think we need to actually just break down how this works, because that's going to help you understand where the opportunities lie and where the risks lie in this housing market, because there are going to be both. In short, the war is going to push up inflation. And actually, as of today, April 10th, when we're recording this, we just saw the first inflation print since the war started. And it wasn't a good one. It was ugly. We saw the CPI, the Consumer Price Index, go up from 2.4% to 3.3% in just a single month. I do believe that inflation is going to stay higher than it was before the war for the foreseeable future. I'll explain that in a minute, but let's just talk about why inflation hurts and why I think it's so important to the housing market.
First and foremost, it impacts consumer spending, right? If people are getting stretched by paying more at the gas pump, they have less money to spend other places.
The second thing is input cost for housing and other goods, right? We've already seen in the last year, the price of construction on the average price home has gone up between $10,000 and $17,000 per home. Depending on who you ask, that's probably going to go up more in the near future because oil prices are up. That means it's not just gas, right? When oil prices go up, you also see everything that goes on a ship go up, right? We use diesel, that's oil. So if you are importing appliances from China, you are importing timber, copper, aluminum, whatever it is, those prices are likely to go up with oil prices as well. That's going to make input costs for housing go up as well. Construction becomes more expensive. But the really big one, the big thing that inflation impacts more than anything when it comes to the housing market is mortgage rates.
And this is why over just the last month, we have seen mortgage rates after dipping so briefly. We got it. We touched it. We touched 5.99 for the average mortgage rate at some point in February. Now they're back up to about 6.3, 6.5. They're hovering in that range the last couple of days because even before this inflation print came out on April 10th, everyone knew inflation was going up. You could see it in the oil prices, right? Oil is such a big part of the economy that seeing that gas prices went up more than 50% since before the war started, of course inflation was going to go up. So that's why mortgage rates have gone up.