Iran war hikes US costs of mortgages, flights, groceries & more

People who are hoping to buy a home may be set back by the climbing mortgage rates,

30-year fixed mortgage increased to 6.11% for the week that just ended on Friday.

It's according to Freddie Mac.

For context, the rate was just under 6% two weeks ago.

That was something that had not happened since 2022.

With me now, Joel Berner, senior economist at Realtor.com.

Joel, good morning to you.

The inflationary pressure that's created by this war is unique.

Typically, as I understand it, geopolitical crises, these rates come down.

People move toward purchasing homes as a safe investment.

What should we expect to see in the near term?

You're exactly right, Victor.

What we would expect to see normally is the safe haven effect, where volatility in the

stock market leads people to invest in bonds instead.

And those interest rates come down.

But what's happening here is that the inflationary expectations are a stronger

effect on the interest rate market than that safe haven effect.

We expect that this war is going to increase prices in the future.

And as prices in the future make money less valuable in the future,

money today, like money for buying a home, becomes more expensive.

And so mortgage rates go up.

And we would have had a really great spring buying season with mortgage rates

dipping below 6% for the first time in a couple of years.

But now we've seen all of those gains go to waste.

And we're in a situation where buying a home now is still advantageous compared to last year.

But not in the same way we were hoping for a really strong spring buying season in 2026.

We've got the numbers up in control room.

Keep them up because that interest rate, 6.7% this time a year ago, as I said a moment ago,

6.11% now with the week that just ended yesterday.

What do you say to people who have been sitting on the sidelines because of tariffs,

because of inflation and jobs numbers when they look ahead to this spring buying season?

Yeah, we still think it's a good time to buy.

We say that there are all the signs pointing in the right direction for buyers.

Inventory is prices are coming down.

Mortgage rates go going up in the short term are still better than they were last year.

So overall affordability in 2026 looks better than it did in 2025 and 2024.

And the last two years had some of the lowest numbers of existing home sales we've seen since the mid 90s.

And so we're really expecting a rebound in 2026.

And now may be the time for those on the sidelines to really look for a home that meets their needs.

Because inventory is starting to expand as people decide to move in advance of the summer moving

season. So there'll be more options and before mortgage rates go up any further,

this could be a really good time to get off the sidelines.

So there was this decision from a judge yesterday to toss the Justice Department

subpoenas for federal grand jury for Jerome Powell, the Federal Reserve chair.

The president has consistently pressured Powell to lower interest rates.

I wonder, is the real estate market expecting changes, pricing in changes or

forecasting what will happen once this Fed Chair's term is up in a couple of months?

We really don't anticipate a lot of change from the Fed.

They're really in a tough position right now, staring down the barrel of stagflation.

Just saw GDP numbers from the fourth quarter of 2025 get revised down and we have inflation numbers

a little bit above expectations even before these wartime changes get priced in.

So we don't see a situation in which the Fed is likely to cut at least in a responsible way.

So even the changeover in leadership there, they're in such a tough position that we're not

pricing in or expecting any rate cuts for the next several months. As far as we can foresee

the impact of this conflict. You brought up the S word stagflation, where inflation stays

high, job growth is low, unemployment grows. I wonder, is this environment more likely more fertile

for stagflation over the next several quarters? The oil shock is really the scary bit there.

I'm not calling for anything to happen or for us to see stagflation necessarily, but it's the

type of the thing that the Fed is thinking about and doing everything they can to prevent.

So really, you know, just the external shock of oil prices being so high, that's something that

makes its way throughout the whole economy because as everything needs to be shipped, it makes

its way into the price of every physical good in the economy. So if we were talking about things

in a vacuum, it would be a little bit less worrying, but that oil shock certainly harkens back

to some historical precedent and some scary uses of the S word. I won't say it again.

Thank you. Joe Berner, senior economist at Realtor.com. I appreciate your time. Thank you.

Jet fuel prices going up from about $250 a gallon a few weeks ago to nearly $4 a gallon today,

a jump of almost 60% since the war began with Iran. The price jumps after strikes on oil

facilities, growing pressure on supply routes and trouble, moving oil through the

straight of her moves. Fuel is one of the biggest costs for airlines, which is why air fairs

are expected to rise. Joining me now, aviation reporter Sean Cuddy-He from the points guy. Sean,

hello to you. Argus has a gallon of jet fuel, the average at $250 a gallon the day before the

war started $3.99 at the end of the week on Friday. Does a ticket that someone books today reflect

that increase in cost or has the airline yet to pass that on? Well, good morning, and I think

increasingly it is reflecting that cost. We saw some reports out from Wall Street in a less

late this past week and the last 48 hours or so that show that ticket prices, if you're looking

about three weeks out for booking, have already risen pretty sharply. We've seen pretty solid

increases, whether you're talking about transatlantic flights to Europe, transcontinental flights,

coast to coast routes in the US, but really just across the board, whether you're going to the

Caribbean or on something kind of short haul domestic. We are definitely starting to see higher

prices and we expect at this point talking with global supply chain experts, I spoken with this

week, the expectation is that this is going to kind of plague travelers as they go to book summer

flights. So we are certainly advising folks to go ahead and get those summer trips locked in if

you're planning to fly. Now, is that for international flights and domestic flights?

I think so. Typically, we will advise that you book international farther out than domestic,

but I think at this point, especially if you're trying to travel in June or July, which are really,

they've really become kind of the two peak months of summer. If you're planning to fly in those

months, I would go ahead and get your trip locked in right now today, even if it's a domestic trip.

Keep in mind, as long as you don't book basic economy, the cheapest fares that a lot of airlines

offer with a lot of restrictions, if you book just a normal ticket, you should be able to go back

and later change your ticket. You're booking if the price eventually does drop at this point.

Obviously, though, we don't really know what's going to happen with pricing, but it certainly

looks like it's only going up at this point. So Sean, we've been reporting this morning and

obviously now for the last two weeks about some of the air travel issues in the region. Of course,

you've got Emirates and Qatar and Etihad as well with those hubs in Dubai and Abu Dhabi and Doha.

If people have flights booked on those, should they reconsider?

Yeah, I think it's definitely worth a second thought at this point. I mean, you heard the report

from Doha just a couple minutes ago there. It's really kind of touch and go and it's such a fast

developing situation. We've seen airlines, American airlines also flies to the region and they've

issued their travel advisory that give travelers basically flexibility to make ticket changes.

That's now extended out through the end of May, so really getting into the summer season there.

I think that it's so uncertain what's going to happen from one day to the next. So the concern

of getting stuck somewhere and not being able to get back, I had family friends that were trying to

get back from India through Dubai. It took them a while to connect back to the US. That's just

kind of the reality for a lot of travelers right now. Yes, we're starting to see more flights than

we were a week or two ago, but it's certainly not completely reliable at this point that you'll

be able to get to your destination. How long, Sean, is the tail of a supplied disruption? Let's

say, you know, the straight-ahor moves essentially shut down because the attacks from Iran right now.

But if that reopens and traffic resumes, let's say April 1, how long does the airline expect that

that will have an impact on their jet fuel prices? And of course, the price passed on to the passenger.

Historically, we've heard airlines say it can take a couple months to use that word there

for kind of the oil prices to affect fares, but we've definitely seen a much faster adjustment

from airlines when it comes to fares going up. So I don't expect fares to go down today or tomorrow,

but certainly if things were to open up again, you would expect that eventually, or you'd hope

at least that fares would come down eventually. I think that's why if you are booking a trip today

for the summer and things do eventually improve or fares go down for some other reason,

to give yourself kind of that out, that flexibility to go in and kind of capture that lower price point,

I think that's really sort of the best you're best bet at this point.

All right, Sean Cutter, he says, act now if you're traveling this summer domestically or internationally,

aviation reporter from the points guy. Thanks so much. She said that Americans voted for the

president to help the affordability crisis and that the president should focus on that.

All right, here's Americans at home right now. We've got families getting ready to go on spring

break and gas prices are skyrocketing. You know, inflation has barely stabilized and people voted

for lower grocery costs. Well, we're going to see cost at the grocery stores going up because

diesel is going up and oil is going up because of this war. We've got 30% of the world's fertilizer

goes through the strait. That affects our farmers that are struggling already. We voted for to put

Americans first. All right, we can...