Russia’s deadly invasion of Ukraine is already having a trickle down effect on the U.S. economy, causing mortgage rates to decrease slightly while pushing inflation even higher. In the weeks leading up to Putin’s initial attacks on Ukrainian soil, U.S. stock markets tumbled but gradually rebounded after President Biden imposed sweeping sanctions against Russia on February 24. Mortgage rates averaged 3.89% during the same week, Realtor.com reports, but more gains could be just around the corner.
Rising oil and gas prices will make goods like food and building supplies more expensive, meaning an increase in inflation and another jump in housing prices. A global conflict is also likely to further halt supply chains, prolonging a supply/demand imbalance for home builders unable to complete new home construction projects.
For now, the uncertainty in the stock market amid fears of a full-blown war in Europe is helping to keep mortgage rates in check.
However, the jury is out on whether rates will stay lower. Moody’s [Mark] Zandi believes they may rise as a result of the turmoil and ensuing inflation.
Another potential fallout for Americans is rising oil and gas prices, as Russia is the second-largest oil producer on Earth. While that is expected to affect prices at the pump and home heating costs, it’s also likely to make goods more expensive. That’s because food, products, and building supplies often require oil in their production. Then they need to be transported around the nation, or even the world, to wind up on store shelves.
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