HOW WILL THE WAR IN UKRAINE AFFECT THE US HOUSING MARKET?

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DISCLAIMER: This video is intended to provide educational/entertainment value. All information should be assessed by a professional and should not be considered legal advice.
Russia invaded Ukraine last week and we have already seen an impact in our economy with gas prices, the stock market, and supply chain issues. But how will it impact the housing market?

During this war, it is likely we will see people staying put. Which means we will continue seeing a lack of inventory, which drives the prices up.
Remember supply and demand? When supply is low, like a housing inventory shortage, and demand is high, like buyers trying to buy before interest rates increase again, the result is higher prices.
With the uncertainty of the stock market, people are pulling money out and putting it in a safer asset, like real estate, adding to the buyer demand.
With the lack of inventory, pressure has been put on new home builders to build faster and cheaper, but with the supply chain issues, goods are more expensive, lumber, flooring, paint, everything is impacted by the supply chain issues causing new homes to be higher in price and taking longer to build.
Interest Rates
The Fed increased interested rates as unemployment went down and our economy got stronger. They have promised to increase them again to hedge against inflation.
As bond prices go up, mortgage interest rates go down and vice versa.This is because mortgage lenders tie their interest rates closely to Treasury bond rates. Bonds are generally thought of as being safer than stocks, but offer lower returns, so with the stock market takes a hit, people transfer their money to bonds and bond prices are going down, causing mortgage interest rates to increase. When the cost of borrowing money rises (when interest rates rise), bond prices usually fall, and vice-versa.
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Видео HOW WILL THE WAR IN UKRAINE AFFECT THE US HOUSING MARKET? канала Real Estate Made Easy with Brittany