March 2026 Mortgage Rates Near 6%, 15‑Year at 5.50% as Iran War and Job Losses Shake Market — Should You Lock In?

The answer used to be simple. Bad jobs data meant rate cuts were coming. Not anymore.

As of 8 March, the 30-year fixed mortgage rate stands at 5.98%, with the 15-year fixed at 5.50%, according to Zillow data reported by Yahoo Finance. That's a 17 basis point jump from the 5.75%–5.87% range just one week ago. And the reason has nothing to do with the US economy.

It's the war.

Oil Crosses $100 for the First Time Since 2022

US oil futures shot past $100 (£75.17) a barrel on Sunday — the first time crude hit triple digits since Russia invaded Ukraine in 2022. By Sunday evening, prices briefly touched $110 (£82.69) a barrel, according to reports. The cause: the US-Israeli military campaign against Iran has effectively shut down the Strait of Hormuz, a narrow waterway that carries 20% of the world's oil supply.

Iran has threatened to target any tanker passing through. Traffic has stopped. And prices are reacting.

Petrol in the US has already jumped to a national average of $3.45 (£2.59) a gallon, up 47 cents from a week ago, AAA data shows. President Donald Trump dismissed concerns on Truth Social, calling the spike 'a very small price to pay' for 'the destruction of the Iran nuclear threat.'

Markets disagree. Dow futures crashed around 900 points, or 1.9%. S&P 500 futures fell 1.9%, and Nasdaq 100 futures dropped roughly 2.3%.

A Jobs Report That Should Have Changed Everything

Three days before oil crossed $100 (£75.17), the Bureau of Labor Statistics reported something that would normally dominate headlines: the US economy lost 92,000 jobs in February.

Economists had expected a gain of 59,000. Instead, payrolls shrank. The unemployment rate ticked up to 4.4%. And revisions told an even grimmer story: December's initial report of 48,000 jobs added was revised to a loss of 17,000.

'Today's data show that the labour market has averaged essentially zero net job creation over the past six months,' said Cory Stahle, an economist at Indeed Hiring Lab.

Healthcare lost 28,000 jobs, partly due to a Kaiser Permanente nurses' strike. Manufacturing shed 12,000. Federal government payrolls dropped by 10,000, extending a decline of 330,000 jobs — 11% of the federal workforce — since October 2024.

Under normal conditions, this data would all but guarantee Federal Reserve rate cuts. Lower rates ease borrowing costs. They stimulate hiring. They push mortgage rates down.

But oil above $100 (£75.17) changes the calculus entirely.

The Fed's March Meeting: Cut, Hold, or Raise?

The Federal Open Market Committee meets on 17–18 March. The federal funds rate currently sits at 3.50%–3.75%, unchanged since January.

Here's the problem. Cutting rates could help the job market recover. But it also risks adding fuel to inflation at the worst possible moment. Oil prices feed into transportation costs, manufacturing, food, and nearly everything. The International Monetary Fund estimates that every sustained 10% rise in oil prices adds 0.4% to inflation.

'Markets are being tugged in opposing directions, and this jobs report adds yet another layer of uncertainty to an already noisy backdrop,' said Seema Shah, chief global strategist at Principal Asset Management.

Fed officials are split. Minutes from the January meeting showed some members wanted to hold rates steady 'for some time'. Others raised the possibility that rate increases could become necessary if inflation stays elevated. Two governors, Stephen Miran and Christopher Waller, voted for a cut even then.

Now, with oil soaring and jobs vanishing, the Fed faces a policy dilemma with no clean answer.

What a Rate Move Means for Your Wallet

The numbers are concrete. For a $300,000 (£225,519) mortgage at 5.98% over 30 years, your monthly payment, including principal, interest, and estimated taxes, reaches roughly $2,037 (£1,531). Over the life of the loan, the total interest paid climbs to about $390,322 (£293,416), according to Yahoo Finance's mortgage calculator. A quarter-point drop saves thousands; a quarter-point rise costs the same.

For those who locked in mortgages between 6.5% and 8% during 2023 and 2024, today's rates look attractive. Refinance activity has surged up 109% year-over-year, according to Norada Real Estate. Redfin projects total refinance volume will jump 30% this year.

But for buyers sitting on the fence, timing matters.

Lock In or Wait?

Here's what we know. Rates at 5.98% are the lowest in three years. That's a fact. A year ago, the 30-year fixed averaged 6.63%, according to Freddie Mac.

Here's what we don't know. If oil stays above $100 (£75.17) for weeks, inflation fears will dominate, and the Fed may hold or even raise rates. Mortgage rates would climb. If the Iran conflict ends quickly and job losses persist, the Fed may cut aggressively. Morgan Stanley has suggested rates could fall to 5.50%–5.75% by mid-2026 under that scenario.

Neither outcome is guaranteed. Both are possible.

For buyers who've found their home and can handle current payments, waiting for a marginally better rate carries real risk. For those who can afford to wait and watch, the next few weeks will tell us a lot.

The answer used to be simple. It isn't anymore. And that's exactly the point.

Disclaimer: Our digital media content is for informational purposes only and does not constitute investment advice. Please conduct your own analysis or seek professional guidance before investing. Remember, investments are subject to market risks, and past performance does not guarantee future results.