The crisis in eastern Ukraine has erupted over the past few weeks and is still intensifying. In response to the increased fighting, Western powers have issued a series of economic sanctions against Russia, leading many to fear that Russia could retaliate or otherwise impact the global economy. Although it’s relatively unlikely that Russia would cause serious consequences for the U.S., including the U.S. housing market, there may be indirect effects that become apparent in the near future due to actions taken by each country.
The current situation in Ukraine is a major concern for the U.S. housing market. The Russia-Ukraine conflict has caused oil prices to rise, which means that the cost of gasoline is going up and people are spending more money on gas.
The average American spends about 11% of their income on transportation and housing, according to the Bureau of Labor Statistics. If gas prices continue to rise, it will be difficult for Americans to afford basic necessities like food and clothing.
Russia-Ukraine War will impact the U.S. housing market in at least two ways:
It will increase the demand for American real estate because of the large number of Russian and Ukrainian immigrants who want to leave their countries for safety reasons.
That’s because the conflict has led to a dramatic increase in the number of Russian and Ukrainian immigrants leaving their countries, with many choosing to move to the United States. In fact, according to a recent report by Bloomberg, Russian emigration to America has grown by more than 50 percent over just the past year.
With so many Russians and Ukrainian now coming to America, how can this affect real estate?
There are several ways that this influx of new residents could have an effect on your home values. First, there is an increased demand for housing across America, which means that prices are likely going up in all markets — but especially in areas where Russian immigrants tend to settle down.
It will reduce demand for American real estate because many Americans will be relocating overseas due to safety concerns or business opportunities related to the war.
The Russia-Ukraine war is having a huge impact on the U.S. housing market, and it’s going to continue to do so for some time.
- Home price appreciation and home sales: The war could drive up home prices in the U.S., particularly in areas where people are leaving to avoid being drafted into the military. However, it’s unlikely that this will be a major driver of home appreciation since most people who want to leave already have by then and because of the fact that most people don’t move for just one reason alone — they likely have several reasons for moving, so even if there was some kind of geopolitical event driving people out, other factors would likely still be at play.
- Construction activity: Construction activity has already been declining for years now due to a lack of demand for new homes; however, it could decline even further due to fewer workers available for construction jobs due to being drafted into the military or have moved away from their current location because of military conscription laws in place at that time — this could lead to a shortage of skilled construction workers needed to build new homes or renovate existing ones.
- Mortgage interest rates: Mortgage interest rates could increase as well due to higher inflationary pressures caused by higher wages paid out.