Thursday, July 30, 2026

Housing Market Holds Steady As Fed Pauses, And Iran War Drags On

By EDDIE RIVERA

Economists watch a fragile balance between resilience and risk

The nation’s housing market is showing quiet resilience even as a widening war in the Middle East and a divided Federal Reserve complicate the outlook for the rest of the year.

The Federal Reserve said Wednesday it would hold its benchmark interest rate steady at 3.5% to 3.75% for a fifth straight meeting, according to the Fed’s postmeeting statement. Fed Chairman Kevin Warsh described the internal debate as a “good family fight,” CNN reported. Three regional bank presidents, Beth Hammack of Cleveland, Neel Kashkari of Minneapolis and Lorie Logan of Dallas, dissented in favor of a quarter-point increase, citing inflation that has stayed above the Fed’s 2% target for more than five years, the Fed said. It was the first three-way dissent on a single policy direction since September 2016, CNBC reported.

The split reflects a broader anxiety running through the economy. Fighting between the United States and Iran resumed in early July after a ceasefire collapsed, and American bombing runs against Iranian targets have continued for more than two weeks, drawing in Saudi Arabia and Yemen’s Houthi rebels and disrupting shipping through the Strait of Hormuz, according to CNN’s ongoing coverage of the conflict. Oil prices have climbed sharply as a result, and the Fed’s postmeeting statement pointed directly to the conflict as a source of economic uncertainty.

Housing data collected before the renewed fighting show an economy still finding its footing. The NFIB Small Business Optimism Index rose 2.1 points in June to 97.4, helped along by a short-lived US-Iran ceasefire signed June 17 that temporarily eased energy costs. That relief appears to have been fleeting. With oil prices spiking again in July, economists expect the August optimism reading to reverse course.

New-home sales nudged up 1.6% in June to a seasonally adjusted annual rate of 628,000, but the gain masked a steep regional divide. Sales in the West fell 24.6% from a year earlier, the weakest showing there since July 2014, when the region was still climbing out of the aftermath of the 2008 housing crash. Builder confidence has followed a similar trajectory, with the NAHB/Wells Fargo Housing Market Index slipping to 34 in July, its 15th straight month below 40, a stretch not seen since 2011 and 2012.

Foreclosure activity offers a more mixed signal. ATTOM reported 39,327 properties with foreclosure filings in June, down 3% from May but up 21% from a year earlier. California recorded one foreclosure for every 3,205 homes, the ninth-highest rate among states, with Lake, Shasta, Sutter and Mendocino counties leading the state. Foreclosure levels nationally remain well below pre-pandemic norms, a sign that homeowner equity and tighter lending standards are still absorbing some of the strain.

A separate report from the Consumer Federation of America found that homeowners insurance costs continue to fall unevenly along racial lines. Nationally, homeowners in majority Black zip codes pay about 16% more for identical coverage, while those in majority Hispanic zip codes pay roughly 30% more. In California, the gaps narrow to 16% for Black homeowners and 4% for Hispanic homeowners, though researchers said the disparity still limits wealth building in communities of color.

With mortgage rates elevated and the war in Iran showing no clear end, economists say the housing market’s next moves will depend heavily on how long the conflict, and the inflation pressure it brings, persists.