How the Iran Conflict Could Impact the U.S. Housing Market

Global conflicts don’t stay overseas — they ripple through energy markets, inflation, and eventually the housing market.

In this episode, I break down how the growing conflict involving Iran could impact the U.S. housing market, mortgage rates, and real estate investments.

As a real estate investor and construction business owner, I look at this through an economic lens — not politics, not panic — just how global events move markets.

Here’s what we cover:

• Iran’s role in global oil production
• Why energy prices react immediately to conflict
• How rising oil prices drive inflation
• The connection between inflation and mortgage rates
• What this could mean for housing prices in 2026
• Whether it’s still smart to buy right now

Right now, the housing market remains relatively stable — but global instability can move markets quickly.

The goal isn’t fear.

It’s awareness.

If you’re a homeowner, investor, or planning to buy in 2026, this is something you should understand.

Transcript

SPEAKER_00 0:00

My name is Omar Mohammed and I'm a real estate investor and I also run a construction company. I make my living through real estate investing and doing flips and construction projects for other real estate investors. You might be asking yourself, what does a conflict thousands of miles away have anything to do with the real estate market here? And the answer is a lot more than you think. But before we get into that, let me give you a little background. Iran is one of the most powerful players in the petroleum. It is a country that holds an enormous influence over the world's energy supply. In fact, Iran is responsible for about 5% of the global oil production, and it holds the third largest oil reserve on this planet. And on top of that, the country exports around 1.6 million barrels of oil every single day. Now here's where things start to matter. Whenever there's a conflict or there is a war or issue going somewhere where the countries that are involved in it has anything to do with the oil industry, energy markets like the gas market and petroleum react immediately. And when the energy market reacts, gas prices move fast. And that's exactly what we saw when the conflict began. Gas price jumped about 14% almost immediately. Now let's put this into perspective. That's nothing compared to what happened in 2021 when gas prices skyrocketed about 40%. So now the real question becomes what does all of that have to do with the housing market Omar? So let me explain. Iran is not only a major oil producer, it also sits on one of the most critical trade routes on the planet, the Strait of Hormuz. Roughly 20% of the world's oil supply passes through that narrow passage. Which means if instability goes throughout this region, if shipping slows down, or if that route is disrupted, oil supply tightens. And when supply tightens, demand stays super high. Now you can see where that's going. Prices go up. High demand, low supply, higher prices all the time. Supply and demand. But it doesn't only stop at gas. When energy price rises, inflation flows. And then when inflation rises, the cost of almost everything goes up. Now you're talking about food, transportation, manufacture, everything. And of course, construction, which is the one I care about the most. But every layer of the economy begins to feel it. But let's talk about the construction industry and be very specific. The cost of transporting materials goes up, the cost of producing material goes up, and the cost of building homes or renovating homes goes up as well. And when that all becomes more expensive, very few projects on a bigger scale are able to move forward. And then when homes become more expensive to build or renovate, they become more expensive to buy. Now let's talk about investors. Whenever the economy becomes uncertain, a lot of investors tend to change their strategy. Risk your investments suddenly become less attractive. Instead, investors move more towards safer assets, places where they feel like their money is safe and protected. A lot of time real estate benefits from the shift, but the rising inflation creates the other challenge. Mortgage rates. When inflation rises, there's a less likely chance to lower interest rates. And history shows us how extreme that can get. Back in 1981, the average 30-year fixed mortgage rate in the United States climbed to nearly 16%. Since then, we have seen decades of gradual decline, eventually reaching one of the lowest points in history in 2021. Mortgage rates were about 2.9. So what happened next? The honest answer is just wait and watch. If the conflict keeps escalating and energy prices keep climbing up further, that happens, inflation can keep rising. Some economists even warned that prolonged instability could begin slowing down the economic growth that we've worked so hard to maintain. But here's the good news. At least for now, the housing market stays relatively stable. Mortgage rates haven't really been very dramatic. In 2025, the average rate was about 6.81%. Right now we're sitting at 6.15%. Which leads to the question everybody's asking: is it smart to buy a home right now in 2026 or get into real estate investment? And the answer is actually gonna shock you. And it's pretty simple. Absolutely yes. If you're a first-time home buyer or somebody that's looking to get in real estate or get into investment, the number one question you should ask yourself are you stable? If that deal is gonna break you or whatever, then you shouldn't do it. When is the best time you should have bought a house? A few years back. The market is elevated, I'm not gonna lie, but it's still stable. But maybe for some people that are not ready, maybe they will lose their job and they only depend on their income. So if they got a house, they might not be able to pay it. So yes, maybe you should wait. But if you feel like you're financially stable and you're able to afford it, yes, go ahead and buy a home. I don't see why you wouldn't, you know? Again, this is not a financial advice or anything like that. This is just based off my own experience. When I got into real estate, a lot of people were like, listen, this is not a time to buy, everything is so expensive. Then I was able to quit my job, travel, and achieve all my goals and build my business, and now we're a multi-unit real estate. Only if I would have listened to some people, so do your own research. One of my hard money lenders told me that. He was like, The first time I lended you money, I bet on you, the joggy, not the horse. Because even if the deal wasn't the best, I knew you would figure it out. So you gotta always bet on yourself. Because global events like this can move the market really quick. But guess what? If it moves on someone, it moves on everyone. The best thing you can do for now is to stay informed, pay attention to the news, watch the economic data, understand the trends, so you don't overpay for something that I see a lot of people do is overpay for something, thinks it will go crazy. It's simple for investing. If you're really thinking about investing, and I do not think buying your first home is investing, your home that you're gonna live in is considered investing. It definitely could be better than rent. I think in investing, those are assets that bring you cash, not something that takes out cash from you. That's the idea of investing, is buying something that puts cash in your pocket. This is not the topic of this video, we can make another video about that. And I'll always do my best to keep you informed, is what I see as well. Right now, we're doing flips and they're going still over asking, and people are buying them. I haven't seen anything scary yet. And if you haven't already consider subscribing, please do. It helps us grow, it helps the channel as well, and I provide a lot of information about real estate, investing, and entrepreneurship. So make sure you follow, and we'll see you all on the next one.