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Mortgage Rates Drop to 6.37% for First Time Since War Began - But Relief May Not Last

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Nate Gregory
Published Apr 9, 2026
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Summary:
  • The Strait of Hormuz has been effectively closed since Feb 28, with only 3 ships observed leaving recently compared to the normal 135 daily crossings.
  • Over 800 freighters are stuck inside the Persian Gulf, with 1,000+ more waiting outside around Dubai and Khor Fakkan.
  • The International Maritime Organization counts 20,000 civilian seafarers stranded with dwindling supplies and growing psychological stress.

The 10-year Treasury yield - which directly drives mortgage rates - dropped below 4.3% on Wednesday after the ceasefire announcement. When geopolitical tension eases, bond investors get less fearful.

They buy Treasuries, which pushes yields down. Lower yields mean lower mortgage rates.

The war had created what traders call a "war premium" - a built-in cushion in rates to account for oil disruptions and economic chaos.

That premium started melting this week.

Why It Might Not Stick

Treasury yields and oil prices are already creeping back up. The ceasefire is fragile. If diplomacy breaks down or fighting resumes, rates could spike right back.

The sticky February PCE inflation reading at 2.8% complicates things too - if the Fed grows less confident about inflation, it holds rates higher for longer.

What to Watch

This window of lower rates might close fast. Watch for headlines from the Islamabad talks on Friday and any oil price movement above $105 per barrel.

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