Putin

What could be the impact of Putin in a triangle of woes with Inflation & spiking gas prices on US Housing Industry?

We are already experiencing the worst inflation rates of the 21st Century. Highest gas price surge as oil costs soars and the icing on top is the Ukraine attack. All these events individually could lead to a recession and at present, you are experiencing all three of them occurring at once.

The stock market and investment portfolios are going through turbulence owing to the overwhelming uncertainty about what’s in store to come next, and it has factual potential to impact the super-overheated U.S. housing market in a substantial and lasting way. The future of the housing market is completely dependent upon these issues & their future movements.

Wages are growing at a fairly rapid pace, though the cost of living is rising even faster due to the inflation your paycheck can buy fewer things. Moreover, Russia’s invasion of Ukraine immediately sent markets worldwide into a volatile frenzy, which has magnified insecurity and could lead to reduced spending. 

The record in gas price surge comes after the average gasoline price topped $4 a gallon last week, with prices continuing to surge amid Russia's war on Ukraine. Drivers in California are facing the highest costs, with the average price per gallon at $5.44. 

This year, oil and gas costs continued to climb after Russia sent troops on the Ukraine border. Prices exploded higher after Russia launched a major invasion on February 24 amid concerns that the conflict could disrupt global crude supplies and trigger economic sanctions.

The higher energy prices could make consumers even more nervous about making house deals, in an economy where consumer sentiment is already dwindling to record lows, according to a recent survey by the University of Michigan. 

The primary driver of pessimistic consumer sentiment in today’s economy has been the 40-year high inflation that has impacted the country in the early months of 2022. This will cut into paychecks and savings. With rents, home prices, and mortgage rates rising, they believe there are only so many buyers can afford. And if another financial downturn seems imminent and potential buyers are worried about the stability of their jobs, that could lead to a complete topsy-turvy.

The early months of 2022 and also the whole of 2021 have not been easy for prospective homebuyers. A combination of low inventory and record demand for new homes has led to prices skyrocketing unbelievably. It was found that last summer’s jump in-home price growth was the largest in over 45 years.

Increasing mortgage rates led to increasing in buyers’ monthly housing payments, but that doesn’t seem to be reducing sales prices. And if you are heading towards buying a new home and it seems to you that the economy might head to a recession, it will compel you to think twice before making your big purchase.

Home Prices

Some housing experts predict that home prices to go down, especially if a recession hits. There’s a reasonable probability that prices could come down, especially in some of the most overheated markets, Though, some experts expect prices will not crash in the way they did in the 2000s unless the nation falls into a nasty recession.

However, wealthier buyers may keep aside the decision of purchasing second homes, investment properties, or larger residences—particularly as their financial portfolios may have been affected badly by the stock market’s volatility.

Sellers, who were planning to buy their next homes, may now become reluctant to list their properties since they might have to confront high prices and soaring rates that will in turn increase their monthly housing payments. 

Some experts believe home prices are more likely to keep rising. That may be especially true in the short term, as buyers prefer to get into the deal before the costs go up even further, potentially out of their reach.

However, there are still many more buyers than there are homes available for sale. That could mean that prices will continue hitting record heights. Instead of an inventory bump, fewer homes may go up for sale as a result of inflation, gas prices, and stock market volatility.

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