While the market is facing fresh uncertainty after the ceasefire’s collapse, a top mortgage lender says the fundamentals still favor buyers who can act
The mortgage market is bracing for another wave of uncertainty after President Trump declared the Iran ceasefire “over” on Wednesday, sending Treasury yields and oil prices higher and threatening to undo weeks of market momentum.
The conflict’s outbreak at the end of February poured cold water over a hoped-for homebuying rebound, and economic unease looks set to return after the fragile truce between Washington and Tehran shattered this week.
Sammy Iliopoulos, senior vice president of mortgage lending at Rate, told Mortgage Professional America that Wednesday’s news could slow a housing market that had been picking up steam through the summer.
But he doesn’t see things grinding to a complete halt even if a more permanent ceasefire proves elusive in the weeks ahead.
“We’ve had a lot of rallies in the last three weeks. Volume has spiked – maybe not doubled, but is certainly up,” he said. “Today is probably going to slow some things down, but we definitely have a lot more activity right now.”
The conflict put upward pressure on mortgage rates in March and April, increasing affordability challenges for many homebuyers and weighing against prospects of a wider recovery.
Still, existing home sales have since shown signs of improvement amid indications that many buyers who are in a position to purchase are pushing ahead with their plans.
And while the fresh escalation in US-Iran tensions might deter some buyers, Iliopoulos doesn’t see it having a catastrophic impact on market activity.
“I do think it will put more people on the sidelines,” he said. “But to be frank, buying a home propels your finances in future years. It’s like the hidden 401(k). If you have the opportunity to own your own home, there’s really not a bad reason to do it unless you’re looking to leave in a year or two.”
Rising home values and declining savings rates, he said, are reasons to act sooner rather than later. “People buy their first home, build equity, sell it, and move on to something better,” he said. “That’s been the whole story for my 25-year career, and it’s worked terrifically.”
Rate fears ‘not as prominent’ despite fresh uncertainty
Iliopoulos also said the fear of sharply higher rates, a persistent worry earlier in the conflict, didn’t seem as prominent in the current market as it was in the spring.
“I don’t find too many people concerned about interest rates as much as I thought they’d be,” he said. “If we were getting closer to 7%, I’m sure there’d be more of an uproar. But I don’t really see too many people complaining – and I have a lot of investor clients that deliberately do DSCR or non-QM products and are OK with a significantly higher rate.”
The average 30-year fixed mortgage rate was up last week, climbing to 6.58% according to the Mortgage Bankers Association (MBA), but Iliopoulos said borrowers appear to have adjusted their expectations after several years of higher borrowing costs.
“It certainly helped that we’ve seen some big dips here and there,” he said. “Rates were approaching 8% three or four years ago – but 7% is always better than 8%, and 6% is certainly better than 7%. And we’re close to 6% in some markets and some scenarios.”
A ‘late spring’ market that could stretch into winter
Even with the complications posed by the Iran conflict, Iliopoulos said the pattern he’s seeing this year closely mirrors a similar stretch in 2019.
“I remember distinctly back in 2019 we had a late spring,” he said. “Rates were a lot higher at some point, and I think that’s what’s happening now.
“I’m ramping up my team because it was a late spring for us in our market, and I think it’s going to play out into the fall and into the winter.”
His main advice for clients who have been house-hunting for an extended period of time: be patient, and take your chances when they come.
“For a lot of my clients who’ve been looking for a very long time, based on the pattern I’m seeing I’m telling them to be prepared for winter, when some homes may stagnate,” he said.
“That’s where you scoop them up and take your opportunity. That’s the long game for picky buyers. They might find something in the winter and get a really good deal.”
Stay updated with the freshest mortgage news. Get exclusive interviews, breaking news, and industry events in your inbox, and always be the first to know by subscribing to our FREE daily newsletter.
