The War in Ukraine & the Economic Impact on the US Housing Market

There are an estimated 4.2 million people who have fled war-torn Ukraine seeking refuge in places like Poland, many of them innocent women and children. Civilian Ukrainian men must stay and fight Russia, saying goodbye to their wives and children. It has been over a month and the war rages on. Though Ukraine has been fighting feverishly to hold their ground, Russia’s military is more than 4x bigger than Ukraine. Despite the David and Goliath odds, Ukrainian forces were able to push back Russian military out of Kyiv. As the death toll rises and there is seemingly no end in sight of this war of attrition, the effects are felt on a global scale.

The Pain at the Pump-oil saw its highest price in 14 years, at one point reaching a staggering $139/barrel. The effect of the war on the energy market toils gas tanks of drivers across our nation. The average gas price is currently just over $4/gallon and continues to fluctuate. We haven’t seen gas prices like this since the housing market crashed in 2008; a chilling reminder that this real estate bubble is the lesser of two evils. California has the nation’s highest gas prices, averaging well over $5/gallon. I think even the bear has had enough of the sunshine state these days. He can’t even afford the cost of living as the state’s spokes-animal.

It’s not just consumers who are feeling the wrath of our dependency on foreign oil. Truckers rely on diesel fuel to transport our consumer goods, and most of our groceries, as fuel costs are rising upwards of $6/gallon for truckers. Speaking of skyrocketing, jet fuel prices have also gone up, so be prepared to spend more on airline tickets for your spring break and summer vacation travels. 

Americans use over 330 million gallons of gas per day. Since gas is a necessity for most people, it’s at the forefront of our minds. It’s something we may even take for granted. But what about the other little luxuries in our daily life that we may overlook that are all products of crude oil. Let’s discover a few things you may not have considered that are affected by crude oil prices. 

Clothes getting tight? They should be, because they became more expensive. Fabric blends like spandex, nylon, polyester, and several other fabric blends come from petroleum. Most people think spending $100 on Lululemon leggings to be a bit exorbitant. I guess they don’t call it “black gold” for nothing. 

Feeling the pinch at the grocery story? Staying within the budget these days and not letting your cart run Neth over is imperative. Ukraine is a major exporter of both corn and wheat in the global food chain. To add insult to injury, Russia is a substantial producer of fertilizer. This ripple effect is now leaving its mark on your grocery store receipt, with leading grocery retailers passing on the high prices to consumers instead of absorbing the cost. 

So, what do gas prices, food and clothing have to do with the US housing market, you may ask? It’s a domino effect that takes a major toll on consumer behavior. If the rise in mortgage interest rates wasn’t enough to dissuade would-be home buyers, the rising cost of everyday necessities may be enough to delay their thoughts on pursuing the American dream, at least for a while.