Middle East Conflict Exposes Real Estate’s Inflation Vulnerability

Mortgage rates jumped back above 6% this week as escalating conflict in the Middle East sent oil prices surging and reignited inflation fears that had finally started to ease. The 30-year fixed mortgage rate climbed to 6.12% on Monday, reversing what had been a steady decline toward the psychologically important 5% threshold. U.S. and Israeli strikes on Iran over the weekend effectively closed the Strait of Hormuz, through which 20% of global oil shipments transit. The 10-year Treasury yield rose more than 11 basis points to 4.05% as investors worried that higher energy costs would force the Federal Reserve to pause or reverse planned rate cuts. Mortgage rates, which loosely follow the 10-year Treasury, moved higher in lockstep...