The fallout from the Iran war is likely to expedite the shift away from fossil fuels and make countries think differently about the role renewables can play in shoring up energy security, analysts told CNBC.

The Middle East crisis has severely disrupted oil exports through the strategically vital Strait of Hormuz, which typically carries about a fifth of the world’s oil and liquified natural gas (LNG) and represents a key choke point for fertilizer trade.

It has shone a light on the extent to which the world remains deeply reliant on fragile fossil fuel trade routes, while surging oil and gas prices have rattled energy markets and triggered widespread inflation fears.

Asia’s reliance on imported energy means it now sits at the forefront of the global fossil fuel crisis, but supply disruptions are also hitting hard in Europe and Africa, where countries are responding to rising fuel costs and a considerable threat to food security.

The head of the International Energy Agency said the energy transition was moving “very strongly” before the Iran war began — but the fallout from the resulting energy shock means countries will likely direct even more investment toward clean energy sources.

“I expect one of the responses to this crisis will be [an] acceleration of renewables. Not only because they are helping to reduce the emissions but also, they are [a] homegrown domestic energy source,” IEA Executive Director Fatih Birol said at the National Press Club in Australia’s capital on Monday.

Clean energy sources dominated new power installations last year, for example, with renewables accounting for 85% of all new global power capacity, Birol said, citing solar as a primary driver of this trend.

“It is amazing. Ten years ago, solar was a romantic story — but now solar is a business,” Birol said.

Fossil fuels, however, such as coal, oil and gas, continue to dominate the global energy mix, meeting around 80% of worldwide demand in 2023, according to the IEA.

“The Iran crisis accelerates the shift to renewables and electrification. High fossil prices drive switching, making already cheap electrotech even more competitive,” Sam Butler-Sloss, research manager at global energy think tank Ember, told CNBC by email.

“In the old fossil fuel world, energy security meant diversifying fuel supply. With electrotech, nations now have the tools to increasingly eliminate imported fuels altogether.”

Electrotech, which refers to solar, wind, batteries and electrified transport, heating and industry, became the world’s dominant engine of global energy growth last year, Ember found in an analysis published in December. This was led by China’s emergence as the world’s first so-called “electrostate.”

Butler-Sloss said electric vehicle adoption had already been rising fast across the world, particularly in Asia, and this crisis adds a further tailwind to that trend. He estimated that scaling up EVs could save importers more than $600 billion a year in oil imports, describing the switch as a “security superlever.”

“This is Asia’s Ukraine moment. In the same way Ukraine compelled Europe to cut gas dependency, Hormuz will push Asia to cut oil dependency – but with even cheaper technology available,” Butler-Sloss said.

Ana Maria Jaller-Makarewicz, lead energy analyst for the Europe team at the Institute for Energy Economics and Financial Analysis (IEEFA), described the Iran war energy shock as “a wake-up call” for the European Union.

Spain serves as a prime example of how countries have been able to limit their exposure to fossil fuel price volatility, Jaller-Makarewicz said.

She noted that Spain’s government had come under heavy criticism following a catastrophic blackout last year, which some policymakers blamed on renewables, but that the country was now reaping the rewards from its investment in wind and solar technologies.

U.S. District Judge Rita Lin said Tuesday that the decision by the Pentagon to blacklist Anthropic’s Claude artificial intelligence models “looks like an attempt to cripple” the company.

Anthropic appeared in San Francisco federal court on Tuesday to ask Lin to temporarily pause the Pentagon’s blacklisting and President Donald Trump’s directive banning federal government agencies from using that technology.

If the preliminary injunction is awarded, the AI startup will be able to continue doing business with government contractors and federal agencies as its lawsuit against the Trump administration plays out in court.

Without the injunction, the company has said, it could lose billions of dollars in business.

Earlier in March, the Department of Defense designated Anthropic a so-called supply chain risk, meaning that use of the company’s technology purportedly threatens U.S. national security. It was the first time an American company had been hit with that designation.

The label, if allowed to continue, will require defense contractors, including Amazon, Microsoft, and Palantir, to certify that they do not use Claude in their work with the military.

“This is something that has never been done with respect to American company,” Anthropic’s counsel Michael Mongan said during the hearing. “It is a very narrow authority. It doesn’t apply here, and it’s not a normal way to respond to the concerns that have been articulated by the other side.”

Palantir is continuing to use Claude in its work with the department as the legal battle plays out, CEO Alex Karp told CNBC on March 12. Anthropic’s model is also being used in the war with Iran.

Anthropic has argued that there is no basis to consider the company a supply chain risk. The company also said it is being unfairly retaliated against because it demanded that the DOD not use Claude for fully autonomous weapons or mass surveillance of Americans. The Pentagon insists it does not use the AI models for such purposes.

Lin said she expects to issue an order on Anthropic’s motion in the next few days.

On Monday, the judge gave lawyers for Anthropic and the government a list of questions she wants answered at the hearing.

One of those questions was: “What evidence in the record shows that Anthropic had ongoing access to or control over Claude after delivering it to the government, such that Anthropic could engage in acts of sabotage or subversion?”

In its motion seeking a preliminary injunction, Anthropic argued that such an order would prevent the company from incurring further economic and reputational harm.

“The government has infringed on Anthropic’s right to speak freely; it has disparaged the company’s good name by stigmatizing it with an unlawful designation as a national security risk; it has deprived Anthropic of government contracts and damaged its relationships with business partners in the private sector; and it has put millions, possibly billions, of dollars at risk,” the motion stated. “Absent immediate relief from this Court, those harms will continue to mount.”

The company also noted that an injunction would not require the U.S. government to use its models or prevent it from transitioning to another AI vendor. 

Before the conflict erupted in late February, Anthropic was one of the first AI companies to partner with many U.S. agencies as the government sought to rapidly upgrade its systems and capabilities with cutting-edge AI tech.

Anthropic signed a $200 million contract with the Pentagon in July and was the first AI lab to deploy its technology across the agency’s classified networks.

But as the company began negotiating Claude’s deployment on the DOD’s GenAI.mil AI platform in September, talks stalled over how the military could use the models.

The department has insisted on unfettered access to the company’s technology for all lawful purposes. 

During the hearing on Tuesday, Lin questioned if the DOD was punishing Anthropic for “acting stubbornly” in negotiations. The government’s lawyer Eric Hamilton said that the company was going beyond the normal scope of a contractor.

“Anthropic is not just acting stubbornly. It’s not just refusing to agree to contracting terms. Instead, it’s raising concerns to [DOD] about how [DOD] uses its technology in military missions,” Hamilton said. “What happens if anthropic installs a kill switch or functionality that changes how it functions? That is an unacceptable risk to [DOD].”

In February after Anthropic and the DOD failed to reach an agreement, Trump issued a Truth Social post ordering federal agencies to “immediately cease” all use of Anthropic’s technology.

“WE will decide the fate of our Country — NOT some out-of-control, Radical Left AI company run by people who have no idea what the real World is all about,” Trump wrote.

WATCH: Anthropic sues Trump administration over Pentagon blacklisting

Abivax is planning to raise money after releasing key trial data in June, its CEO told CNBC on Tuesday, signaling to potential buyers of the firm that it is in no rush to sell.

Intense takeover rumors have surrounded the French biotech company for months, impacting the volatile stock that rose nearly 1,700% in 2025. Analysts see it as a prime takeover target, and several pharma giants have been rumored as potential buyers. 

A second late-stage trial assessing the long-term, maintenance effect of Abivax’ lead, and only, asset obefazimod will read out late in the second quarter. Subject to positive data, it plans to apply for U.S. Food and Drug Administration approval in the fourth quarter, the company has said.

The drug is widely seen as a potentially best-in-class medicine for ulcerative colitis and is also being tested as a treatment for Crohn’s disease, opening it up to a multi-billion-dollar market for Irritable Bowel Syndrome (IBS).

“It’s more logical again, for outside of the U.S. to wait post maintenance, because, as you know, the terms are going to be better… since we’re confident that this study is going to read positively,” Abivax CEO Marc de Garidel said, when asked about future partnerships and deals.

“Why hurry,” when the company is three months away from the readout, he said.

Investors see the next trial results as a major inflection point for the company and one that potential buyers are watching closely.

It is “really likely” Abivax will raise funds through a potential combination of equity financing and debt after the maintenance data, de Garidel said. “We are currently assessing how much money we need to raise in, let’s say, late June… to take us to profitability.” Funds raised would be at least several million, he added.

The company has consistently emphasized that it has enough cash to carry it through late 2027, and on Monday reported a cash pile of 530 million euros ($613 million) as of the end of 2025. In July last year, it raised nearly $750 million shortly after another clinical trial sent shares up 510% in one day.

Abivax appears to be signaling to potential buyers that it is in no rush to secure an offer. It also announced late on Monday that former Takeda Vice President Michael Nesrallah will take on the role of chief commercial officer.

Its research and development expenses in 2025 increased by 31.2 million euros to 177.8 million euros. Overall expenses will ramp up by late 2026 and 2027, mostly due to commercial expenses, de Garidel told CNBC, also highlighting more key hires on the commercial side over the next six months.

Biotech companies nearing launch must always make preparations to go at it alone without the backing or the acquisition by a larger peer, said Van Lanschot Kempen analyst Sebastiaan van der Schoot.

“But the overall assumption is that they will be acquired prior to approval and prior to launch,” van der Schoot said, adding that a positive maintenance trial readout is already largely priced in to the company’s share price.

Stifel analyst Damien Choplain said earlier this month that given the strength of Abivax’ earlier data and the scarcity of comparable assets, he expects a deal could be made ahead of the maintenance data readout, even if a post‑readout could maximize value.

A global launch is too much for the still small company, which currently only has around 150 employees, said de Garidel.

“After the maintenance readout, outside of the U.S., we will look for a partner, or partners depending upon who is interested and the profile of those companies, to try to launch outside of the U.S,” he added.

However, U.S. President Donald Trump’s so-called Most Favored Nation drug pricing policy has become a complication as it eventually looks to launch obefazimod outside of the U.S. MFN refers to pegging drug prices in the U.S. to the lowest level paid in a comparable country.

When the company eventually finds a partner outside of the U.S., “we have to bear in mind that everything this partner does outside of the U.S. doesn’t jeopardize what happens in the U.S.,” de Garidel said.

President Donald Trump said in a Truth Social post Monday that, following talks with Iranian authorities, he ordered the U.S. military to postpone strikes on Iran’s power plants and energy infrastructure for five days.

He told CNBC’s Joe Kernen in a phone call shortly after the post that “we are very intent on making a deal with Iran.”

However, Iranian state media, citing an unnamed “senior security official” in a post on Telegram disputed Trump’s description of conversations, saying direct or indirect talks have not taken place between Washington and Tehran.

“There is been no negotiation and there is no negotiation, and with this kind of psychological warfare, neither the Strait of Hormuz will return to its pre-war conditions nor will there be peace in the energy markets,” state media reported the official as saying.

Trump countered later Monday morning that the U.S. and Iran “have had very, very strong talks” yielding “major points of agreement,” including that Tehran will “never have a nuclear weapon.”

Trump, speaking to reporters in Palm Beach, Florida, said his son-in-law Jared Kushner and U.S. special envoy Steve Witkoff participated in those talks Sunday evening with “a top person” in Iran.

“They want, very much to make a deal. We’d like to make a deal too,” he said. “We’re going to get together today by, probably, phone, because it’s … very hard for them to get out, I guess. But we’ll, at some point, very, very soon, meet.”

Trump said that if the five-day halt in strikes goes well, the parties could end up “settling this.”

“Otherwise, we’ll just keep bombing our little hearts out,” he said.

The president also said that he believes Israel will be “very happy” with the progress made with Iran so far.

He added that the Strait of Hormuz “will be opened very soon, if this works.”

Asked who would control the strait, Trump said it might be “jointly controlled” by himself and “whoever the ayatollah is,” suggesting that such a move would come as part of a “very serious form of regime change.”

In his Truth Social post earlier Monday, Trump said that the U.S. and Iran had “VERY GOOD AND PRODUCTIVE CONVERSATIONS REGARDING A COMPLETE AND TOTAL RESOLUTION OF OUR HOSTILITIES IN THE MIDDLE EAST.”

The U.S. president said these talks would continue through the week. It was not immediately clear who participated in the talks or when and where they were held.

U.S. stock futures rallied, the dollar fell against other major currencies, and oil prices tumbled on the news.

Speaking with Kernen, Trump said discussions with Iranian authorities had been very intense and that he remains hopeful something very substantive can be achieved.

The U.S. president also insisted on the same call that what is unfolding in Iran can be described as regime change, Kernen reported.

The White House did not immediately respond to CNBC’s request for additional information about the purported talks, and did not immediately respond to Iran’s claim that no such negotiations are underway.

The U.S. president on Saturday issued a 48-hour ultimatum to Tehran to reopen the Strait of Hormuz or face strikes on Iran’s power plants.

The narrow waterway is a key maritime corridor that connects the Persian Gulf and the Gulf of Oman. Roughly 20% of global oil and gas typically passes through it.

The deadline had been due to expire on Monday evening in Washington.

Iranian Parliament spokesperson Mohammad Baqer Qalibaf had said critical infrastructure and energy facilities in the Persian Gulf region could be “irreversibly destroyed” should Iranian power plants be attacked.

Shipping traffic through the Strait of Hormuz has virtually ground to a halt since the U.S. and Israel launched airstrikes on Iran on Feb. 28. Iran has retaliated by targeting ships trying to pass through the strait, with several incidents reported in recent weeks.

The Iran war has stoked global inflation fears and created what the International Energy Agency calls the largest supply disruption in the history of the oil market.

— CNBC’s Anniek Bao contributed to this report.

The head of the International Energy Agency said on Monday that at least 40 energy assets across nine countries in the Middle East have been “severely or very severely” damaged since the Iran war began, raising fears of prolonged supply disruptions.

Speaking at the National Press Club in Australia’s capital, IEA Executive Director Fatih Birol said damage to oil and gas fields, refineries and pipelines across the Middle East would take some time to repair.

His comments come as market participants closely monitor threats from the U.S. and Iran over energy facilities as the sprawling regional conflict enters its fourth week.

The Iran war has severely disrupted energy trade flows through the strategically vital Strait of Hormuz, creating what the IEA says is the largest supply disruption in the history of the global oil market. The global supply of liquefied natural gas (LNG) has also been reduced by roughly 20% since the conflict began on Feb. 28.

Birol said the fallout from the Iran war is equivalent to the two major oil crises of the 1970s and the 2022 gas crisis “put together.”

He added: “And, if I may, not only oil and gas. Some of the vital arteries of the global economy, such as petrochemicals, such as fertilizers, such as sulfur, such as helium. Their trade is all interrupted, which would have serious consequences for the global economy.”

U.S. President Donald Trump on Saturday threatened to “obliterate” Iran’s power plants if Tehran did not fully reopen the Strait of Hormuz within 48 hours.

The narrow waterway is a key maritime corridor that connects the Persian Gulf and the Gulf of Oman. Roughly 20% of global oil and gas typically passes through it.

Iran’s Parliament spokesperson Mohammad Baqer Qalibaf responded, saying that critical infrastructure and energy facilities in the Gulf region could be “irreversibly destroyed” should Iranian power plants be attacked.

Given that shipping has virtually ground to a halt in the Strait of Hormuz since the conflict began, the IEA’s Birol said the reopening of the waterway was the “single most important” solution to the global energy crisis.

He singled out Asia as being at the forefront of the Iran war energy shock and said the IEA was prepared to follow-up its historic release of 400 million barrels of oil to the market on March 11.

“If it is necessary, of course, we will do it,” Birol said.

— CNBC’s Anniek Bao contributed to this report.

President Donald Trump on ​Saturday ​threatened ​to send federal ⁠immigration agents ‌to U.S. ⁠airports unless congressional Democrats immediately ‌agree to fund the Department of Homeland Security.

“I will move our ⁠brilliant and ‌patriotic ‌ICE Agents to the Airports ⁠where they will ⁠do ⁠Security like no one ​has ‌ever seen before,” Trump wrote in ​a Truth Social post. The Trump administration has faced heavy criticism for aggressive deportation tactics by Immigration and Customs Enforcement and Border Patrol agents.

Trump claimed ICE agents handling airport security would arrest immigrants who are in the U.S. illegally, specifically targeting individuals from Somalia.

In a separate post later in the day, Trump said he plans to move ICE agents into airports as soon as Monday, telling them to “GET READY.”

“I look forward to moving ICE in on Monday, and have already told them to, ‘GET READY.’ NO MORE WAITING, NO MORE GAMES!” he wrote.

When asked for comment, the White House referred to Trump’s social media. DHS did not immediately respond to CNBC’s requests for comment.

A bipartisan group of senators met with DHS border czar Tom Homan last night to discuss additional immigration enforcement concessions made by the White House on Friday in an attempt to end the partial government shutdown, POLITICO reported, citing lawmakers in attendance.

The Senate is in session Saturday and Sunday, working on other legislative issues, but it is unclear whether further talks or a vote on the new DHS funding proposal will take place.

Democrats are demanding changes to how federal immigration enforcement operates in exchange for releasing the funding. The White House and Democrats have been trading proposals for over a month but have not yet come to an agreement on a deal.

The DHS shutdown has been less disruptive than last year’s record-long government shutdown. But since much of DHS is considered essential, employees are required to work without pay.

The effects of the funding lapse and lack of pay are being felt at U.S. airports, where Transportation Security Administration agents are quitting or calling out sick. DHS employees missed their first full paychecks last week.

The shortage of agents has caused obscenely long lines at security checkpoints, including in Atlanta and Houston, where spring break travel is in full swing.

“If a deal ⁠isn’t ‌cut, you’re going to see what’s happening today ⁠look like child’s play,” Transportation Secretary Sean Duffy told CNN on Friday. Earlier in the week, Duffy warned that smaller airports could shut down entirely soon due to staffing.

In a separate post earlier in the day, Tesla CEO and former Trump advisor Elon Musk said he would like to cover the paychecks of TSA ⁠officers as the shutdown continues.

“I would like to offer to pay the salaries of ‌TSA personnel during this funding impasse that is negatively affecting the lives of so many Americans at airports throughout ​the country,” Musk, the world’s richest man, said in a post on X.

Musk did not immediately respond to a request for comment.

The average salary for TSA agents is about $46,000 to $55,000, according to a recent Associated Press report.

It’s unclear how such an offer would work.

Last year, Trump announced a wealthy, unnamed donor provided $130 million to help cover military pay shortfalls caused by the administration’s first government shutdown, the longest in history. That mystery donor was revealed to be Timothy Mellon, an heir to a renowned Gilded Age banking family, The New York Times later reported.

But Mellon’s donation worked out to only about $100 per service member. It costs nearly $6.4 billion to pay U.S. troops every two weeks. And such a donation might have violated the Antideficiency Act, which bars federal agencies from spending funds that have not been appropriated by Congress, the Times reported.

— Annie Nova and Dan Mangan contributed reporting

The White House has choked off Cuba’s oil supply and threatened a “friendly takeover” of the communist-run island, against a backdrop of military operations in Venezuela and Iran.

U.S. President Donald Trump is implying the country is his next target, saying: “Whether I free it, take it,  I think I can do anything I want with it. They’re a very weakened nation right now.” The oil shortage is bringing Cuba’s economy to the brink. But I’ve found myself thinking back when, not that long ago, it briefly looked like the two nations would normalize relations after decades of hostility.

I first landed in Havana in March 2012 to cover Pope Benedict XVI’s visit. The airport was small. I had to repeatedly explain to immigration officials that we were there as journalists, that we had permission, and that everything had been cleared in advance. I was grateful that my team spoke Spanish to help with the process.

Parts of the city felt strangely familiar from images I’d seen of faded pastel buildings and old American cars somehow still running on patched-together parts.

Cuba and the U.S. had been geopolitical foes for more than 50 years. Cuba became communist when the 1959 revolution brought Fidel Castro to power and the island nation, just 90 miles from Florida, strengthened its ties with the Soviet Union. The Cuban government seized U.S. property and American-owned businesses in response to a growing U.S embargo. In response, President John F. Kennedy formalized a full embargo in 1962. Supplies of food, fuel, and consumer goods quickly became scarce.

But being there, I sensed that something was beginning to shift.

Between 2012 and 2016, I made 10 trips, field producing for CNBC with international correspondent Michelle Caruso-Cabrera. Almost every visit seemed to line up with something significant — moments that felt like they might mark a turning point. But by the end, that momentum felt suddenly uncertain.

On my first visit, Havana was trying to look ready for a pope. Fresh paint lined parts of the Malecón, still drying in places along the route the pope was expected to travel. In a country shaped for decades by communism, his presence felt like more than a religious event. It felt like a signal, subtle but unmistakable, that Cuba might be opening up.

After that, things started to move quickly.

Less than a year later, the government invited a small group of journalists, including us, to see what it called “reforms” up close. We spoke with the central bank governor, and with small business owners trying to navigate a system that was changing, but not all at once.

We slipped away from the official itinerary and made our way to Hershey, Cuba, a town Milton Hershey built to secure sugar for his chocolate business in the early 20th century. It was one of several reminders of Cuba’s American past before its revolution. A former Coca-Cola factory had been repurposed by the state. A Western Union building housed the country’s telecom company. A Woolworth’s store had become a local discount store.

In July 2015, President Barack Obama announced the restoration of diplomatic ties. We moved quickly, out of New York, down to Miami, then onto a charter flight to Havana. On the ground, there was a real sense of excitement. But it wasn’t unguarded. People were hopeful, but careful.

A month later, the U.S. embassy reopened for the first time in more than 50 years. I watched the flag go up from the balcony of a crumbling apartment building across the street. For younger Cubans especially, it felt like a turning point: More opportunities, more access, more choice seemed within reach.

Obama’s visit the following March only added to that feeling. Travel restrictions for Americans were relaxed and limited trade began to restart. The embargo was still in place, as it is written into U.S. law, but it did slightly soften.

That week brought a Rolling Stones concert and a Major League Baseball game, the first on the island in years.

Even then, there was restraint. Cubans had learned not to get ahead of themselves. For many, optimism came with the memory of how quickly it could fade. After all, not everyone believed the United States should reopen relations with the country. Many argued that normalizing ties would reward the communist government without forcing meaningful reforms.

Still, things were changing. In 2016, Carnival Cruise Line, under its Fathom brand, docked in Havana, the first U.S. cruise ship to visit the island since 1978. By November, JetBlue had direct flights running from New York. For a time, it felt like the barriers were coming down in real time.

Reporting there was never simple. Permits could fall through without warning. Phones rarely worked. Wi-Fi was hard to find. Restaurants handed out long menus, but when you asked, you were often told the only thing available was rice and beans. I’d walk past buildings with elegant facades, only to step inside and find them hollowed out, crumbling, little more than dust and debris.

And yet, on each trip, you could see small signs that the transformation was continuing. Family-run restaurants began opening in people’s homes. Airbnb listings started to spread. It wasn’t dramatic, but it was there.

My final trip came in November 2016, just after Fidel Castro’s death, to cover his funeral. He’d ceded power to his brother Raoul years earlier, but the death of the man who symbolized the revolution was a huge moment.

This time, Havana was quiet.

Music stopped. Alcohol disappeared. The city entered a formal mourning period. People stood in long lines to sign condolence books.

From the outside, it looked like a clear ending. Inside Cuba, it didn’t feel that simple.

Standing there, it was hard not to feel that the energy of the previous years was slipping away. The same questions kept coming back. What happens now? What becomes of the reforms? Of the relationship with the United States?

When I left for the last time, I had the sense I’d witnessed something rare, a brief stretch of time when history seemed to accelerate, when long-standing patterns loosened, even if only slightly, and the future felt, for a moment, open.

In the years since, much of that momentum has slowed, and in some cases reversed. The U.S. withdrew embassy personnel, new travel limits were imposed in November 2017, and the flow of American visitors thinned. The opening that once felt within reach has given way to more familiar tensions, which are flaring like the changes I saw never happened.

History doesn’t always arrive with a clear beginning or a clean ending. In Cuba, it has a tendency to circle back on itself.

What comes next between these two neighbors is still unwritten.

Spring is traditionally the busiest season for home sales, and while this year’s market dynamics have shifted strongly in favor of buyers, broader forces in the economy are creating significant challenges.

The most important factor in any season is mortgage rates. They were expected to be lower this year, as the Federal Reserve dropped its lending rate to counter inflation, but the war with Iran has turned that on its head. The cost of oil is shooting higher, leading to rising inflation and causing the Fed to reconsider.

Now U.S. bond yields are rising, with mortgage rates following suit.

The average rate on the popular 30-year-fixed mortgage had started this year lower, even briefly dipping below 6% at the end of February, but it rose sharply this week to 6.53% on Friday, the first day of spring, according to Mortgage News Daily. It is now just 18 basis points below where it was a year ago.

Higher rates will weigh on affordability, but other factors have flipped the market in favor of buyers. Homes are sitting on the market longer, sellers are increasingly willing to lower prices and the supply of homes for sale is rising, albeit not as quickly as it should be.

“As the housing market approaches the ‘best time to sell’ season, it sits in a precarious position, caught between long-term improvements and sudden short-term instability,” Jake Krimmel, senior economist at Realtor.com, wrote in a Weekly Housing Trends report. “Everything seems much more unsettled and uncertain than it did just a month ago.”

For the week ending on March 14, active inventory was up 5.6% year-over-year, according to Realtor.com, but new listings were down 1.4%.

This means the number of homes for sale is climbing not because there are so many more sellers, but because the homes on the market are sitting. That may be because potential sellers who expected to put their homes on the market are holding back due to concerns about the implications of the Iran war.

“I think inventory is the bigger decider,” said Jonathan Miller, director of markets for StreetMatrix, a housing market data provider. “The idea that rates are going to noticeably come down this year, I think, is generally off the table.”

Given the disparity in inventory across different markets, this spring is likely to be a tale of many cities.

For example, in February, active listings in Las Vegas, Seattle, Cincinnati and Washington, D.C., were all up over 20% from a year ago, according to Realtor.com. Listings in San Francisco, Chicago, Miami and Orlando, Florida, meanwhile, were lower than a year ago.

Home prices had been cooling off for much of the past year, and they continue to do so. Prices were just 0.7% higher in January than they were in January 2025, according to Cotality. That’s down from the 3.5% annual growth at the beginning of 2025. Higher mortgage rates, however, are taking away from that improved affordability.

The Northeast and Midwest are seeing the strongest price appreciation, led by New Jersey, Connecticut, Illinois, Wisconsin and Nebraska, due to tighter supply in those regions, according to Cotality.

Cotality ranks 69% of top metropolitan housing markets as overvalued, noting undervalued markets like Los Angeles, New York City, San Francisco and Honolulu could see a rebound in prices in 2027.

“Ultimately, locations with consistent job growth will remain the primary engines for price appreciation, but they also have larger inventory deficits which are driving pressure on home prices,” Selma Hepp, Cotality’s chief economist, wrote in a recent report.

As for new construction, buyers are likely to see better deals this spring, as builders are struggling to unload an oversupply of homes. Inventories hit a 9.7-month supply in January, according to the U.S. Census, as the result of sales falling to the lowest level since 2022. A growing share of builders cut prices in March, according to the National Association of Home Builders.

“Affordability for buyers and builders remains a top concern,” Bill Owens, chairman of the NAHB, said in a release. “Many buyers remain on the fence waiting for lower interest rates and due to economic uncertainty. Builders are facing elevated land, labor and construction costs and nearly two-thirds continue to offer sales incentives in a bid to firm up the market.”

Construction of single-family homes also dropped in January. While some are blaming rough winter weather for the weakness in the new home market, builders are consistently battling affordability for both their customers and their own bottom lines. Costs for land, labor and materials have not eased.

“I think this is not going to be an inspiring year for the housing market. It started out with high expectations. I think the war, whatever the outcome, has really dampened enthusiasm and kept uncertainty really high,” StreetMatrix’s Miller said.