Russia’s invasion of Ukraine and its subsequent economic isolation have roiled financial markets around the world, but the disruption is unlikely to have much impact on the U.S. housing market, at least for now. 

Foreign buyers of U.S. residential real estate accounted for less than 2% of transactions between April 2020 and March 2021, and Russian buyers accounted for less than 1% of those, the National Association of REALTORS® reported. 

Among U.S. markets popular with Russian buyers, Florida, Georgia and New York took the top three spots, garnering 29%, 16% and 13% of Russian investments between April 2015 and March 2021, NAR said, citing its survey of international business transactions. 

NAR surveys also found that 41% of Russian residential-property buyers lived abroad, while 59% lived in the U.S. on visas, in line with foreign buyers overall. Just over half (51%) of Russian purchases were in cash, compared to 44% of all foreigners, and condominiums were more popular with Russians, comprising 26% of their purchases vs. 17% of all foreign buyers. Russians living abroad may have difficulty keeping up on their condo fees, but the overall impact on the condo market will be minimal, given the tiny share of the housing market held by Russians, NAR said. 

Any decline in foreign demand could actually benefit the market, which has been hamstrung by high demand and a severe dearth of supply, NAR said, adding that in the short term, mortgage rates could decline due to geopolitical tension, even as the Fed raises rates.  

Negative impacts on the housing market from the war are most likely to come from sustained oil prices above $100 per barrel, deeper effects of higher inflation, larger future interest rate increases, weaker global currencies relative to the U.S. and slower global growth, NAR said.