US Housing Market Faces Strain Amid Rising Mortgage Rates and Geopolitical Uncertainty

The US housing market is struggling as the impact of higher mortgage rates, fuelled by the US-Israeli war in Iran, begins to bite.

Figures from the National Association of Realtors (NAR) showed the number of homes sold in March hit their lowest level for nine months, falling by 3.6% from a month earlier.

Average rates for a typical 30-year fixed deal stood at 6.37% last week, up from 5.98% before strikes on the country began in February.

"Some buyers feel like they're frozen - they don't know how to make their decisions because events like the ones we're talking about spring up so rapidly and so out of our control," said Andrew Vallejo, an estate agent in Austin, Texas.

NAR recorded 3.98 million existing home sales in the US in March, the lowest number since June. The figures largely reflect sales agreed before the war broke out, but show the market was showing signs of strain before strikes began.

But, following drops in January and February, rates have shot up since the US-Israeli war began. They are increasing on expectations the US central bank could continue to hold interest rates in order to keep inflation under control, dashing hopes of further cuts by the Federal Reserve.

March's sales figures were impacted by a drop in consumer confidence and weakness in the US jobs market, NAR chief economist Dr Lawrence Yun said.

Limited supply also pushed up the price of a median home to $408,800 (£304,000), 1.4% higher than a year earlier.

"It's a topic of concern that we're all aware of because it would make people lose jobs," Vallejo said.

"A lot of it has been buyers feeling like they should either wait a little bit... and then for sellers, I think that in their mind they were hoping it would be a bit of a less chaotic world this year and things would be a little bit more calm."