The Iran War: How does war impact home values?
Jun 29, 2025
How does war impact home prices in America? πͺ
It's been less than 10 days since the U.S. bombed Iran and conflict in the Middle East ratcheted up a notch.
While the bombings might be out of the news cycle already, it's still likely a concern for many people - including homebuyers and sellers.
Naturally, those focused on the conflict might assume that it's better to wait for more peaceful times to take action.
But does war negatively impact real estate?
Specifically, should buyers be cautious and pause their real estate search in times of conflict? Or should you discount your listing to strike a deal in case things get worse?
Let's see what the numbers say...
Home Prices & War π
It's reasonable to assume home prices in the U.S. could take a dip during a significant military conflict involving the United States.
If things get heated quickly, buyer demand could plummet.
Here's how home prices have changed over time according to the Case-Shiller Home Price Index. I've called out the major wars the U.S. has been involved in on the chart below:
According to the index, home prices in America have increased over 8,900% since 1890.
The only significant decline in home values since the 1929 Great Depression wasn't a result of military conflict, but rather over-leveraged homebuyers and bad loans.
Opportunities for Real Estate Agents π
Here are some takeaways you won't want to miss:
- π’ Unfortunately, war is pretty normal.
When you see it on the chart, you start to realize we're involved in a military conflict most years. In fact, when you go off the VA's official list of declared wars, the U.S. has been at war 147 of the 249 years she's existed (60% of the time). That number is much higher when we factor in covert operations not formally declared as wars. - π Prices tend to rise over time - even when there's war.
Looking back at our history, there's no negative relationship between war and home prices. The math actually shows that home prices and war are positively correlated. It doesn't mean that war causes home prices to rise, but unless the war actively moves into America, I'm not worried about home prices going down because of armed conflict overseas. - π― Focus on what you can control.
It can be easy to let the news bring you down. It's designed to keep you in a state of fear so you'll keep watching. But that doesn't help you in any way. And letting the fear-inducing headlines keep you from accomplishing your personal goals is a huge mistake. This goes for everyone including Realtors, homebuyers, and homeowners.
My guess is your clients might breathe a little easier if they knew this. Feel free to forward this letter to whomever may be concerned.
It's easy to expect the worst, but reality is usually never as bad or good as our extreme expectations lead us to believe.
Each day, let's pray for peace and work to create the life we want to live. π
Dr. Alex Stewart
Founder
FAQ: How Does War Impact Home Values?
1. How does war affect real estate prices?
War can lead to decreased demand for housing due to uncertainty and potential destruction, often resulting in lower real estate prices if an area is in direct threat of armed combat and damage. If a country is involved (like the U.S.), but the war is taking place overseas, historical data shows no negative impacts of the war on real estate values.
2. What areas are most impacted by war in terms of home values?
Areas directly involved in conflict or close to war zones typically see the most significant impact on home values, with nearby regions also feeling economic repercussions.
3. Can war lead to a housing market crash?
Yes, prolonged conflict can lead to a housing market crash in areas of direct combat as uncertainty drives buyers away, leading to oversupply and falling prices. The risk to countries fighting from a distance is more financial in nature. Should a country overextend its resources and economic conditions shift enough, financial collapse could follow.
4. How do local economies influence home values during wartime?
Local economies in areas of direct combat often suffer during wartime, which can result in job losses and reduced income, further decreasing home values. Combat-free areas will likely be insulated from any economic challenges unless the war pulls citizens or resources from the area.
5. Are there any positive effects of war on home values?
In some cases, war can lead to increased demand for housing in safer areas as people flee conflict zones, potentially driving up prices in those regions. In the history of the United States, home values have continued to rise throughout all the armed conflicts the nation has been involved in. This is primarily because the wars happened away from U.S. soil.
6. How long does it take for home values to recover after a war?
The recovery time for home values after a war varies greatly, depending on factors like the extent of damage, economic conditions, and the speed of rebuilding efforts.
7. What should homeowners do to protect their property value during wartime?
Homeowners can protect their property values by maintaining their homes, staying informed about local market conditions, and being proactive in community rebuilding efforts.
8. How does war influence the rental market?
War can lead to increased demand for rental properties in safer areas, while rental prices may drop in conflict zones due to reduced demand.
9. Are there government programs to help homeowners during wartime?
Yes, many governments offer assistance programs for homeowners affected by war, including financial aid, loan modifications, and rebuilding grants.
10. What long-term effects does war have on home values?
Long-term effects can include sustained lower home values in conflict-affected areas, while some regions may see increased values due to a shift in population and investment.
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