It wasn’t long ago that the 2022 Russo-Ukrainian War began with a bang, but it may be a while yet before we understand the full impact it may have on US housing prices. What does this new conflict mean for you as a first-time homebuyer, someone seeking a VA or USDA mortgage loan, or someone who already has a mortgage? No matter what your current situation is, Liberty Lending is here to work with you every step of the way.
Whether we like it or not, mortgage rates have been slowly but steadily rising over the past three years. This is good news for homeowners, but not-so-good news for homebuyers. But the Russo-Ukrainian War has already begun to buck this trend and there’s no telling what the future holds. In the hours and days following the alarms of war, mortgage rates took a small but noticeable dip that could signal declines in the future. In times of conflict, markets feel strange and uncertain, and global investors divest from real estate ventures and into safer United States treasury bonds. With more volatile market conditions, people tend to feel less certain and more insecure about making large purchases such as a new home. The Fed, already ahead of the curve, has announced multiple increases to its rates throughout the year 2022, which can indirectly impact mortgage rates.
It’s not just mortgage rates that have been on the rise either. Inflation in the United States is at its highest since the early 1980s, causing prices across the board, including the cost of buying a new home, to climb year over year. The COVID-19 pandemic has contributed to international supply chain shortages, which directly impact the price of key components for home construction such as lumber and steel. With the piling on of the Russo-Ukrainian War, oil prices could jump as well, leading to even more severe inflation. Wealthy Russians, well-known for their love of United States luxury real estate, may find it difficult to lock down coastal properties in the coming months as sanctions begin to crack down on foreign investments and shell companies.
“May you live in interesting times” is a well-known blessing and curse, and it would seem that the months and years ahead will certainly prove interesting for real estate investors, first-time homebuyers, and those seeking VA, USDA, or other types of mortgage loans. Liberty Lending’s house is built on the rock of integrity and trust, principles our customers can count on in interesting times.