Direct Harm to Real Estate Unlikely From Russia-Ukraine Conflict

A colored map of eastern Europe focused on the country of Ukraine.

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The Russian invasion of Ukraine has prompted speculation about any impact on the real estate market in the U.S., but it’s not likely to have much of an effect, according to a blog post by the National Association of REALTORS®’ researchers.

“Any decline in international real estate transactions will have little direct impact on the U.S. housing market,” Gay Cororaton, a research economist for NAR, writes on the association’s blog.

Russian buyers comprise less than 1% of foreign buyer purchases in the U.S., and they participate in so few U.S. real estate transactions that it’s unlikely they would cause a major disruption in the market. Transactions involving Russian buyers are most common in Florida, Georgia, and New York. But even in Florida, which has the most purchases by Russian buyers, they account for just 0.2% of Florida’s total sales.

Overall, foreign buyers account for about 2% of overall existing-home sales, according to NAR’s 2021 International Transactions in U.S. Residential Real Estate Report.

Further, “the decline in foreign demand will ease supply constraints for domestic buyers,” Cororaton writes. “And in the short-term, with escalating geopolitical tension, the U.S. Treasury Note and 30-year mortgage rate may not move in lockstep with the federal funds rate as investors reallocate their portfolios toward U.S. Treasuries, as happened last week when the 30-year fixed-rate mortgage rate fell to 3.76%.”

That said, Cororaton cautions higher oil rates, larger future interest rate adjustments, weaker global currencies, and slower global growth could still pose risks to the U.S. housing market going forward. Read more from Cororaton’s commentary about the impact of the Ukraine-Russia conflict on the U.S. at NAR’s Economists’ Outlook blog.