How the Iran War Made Global Housing More Expensive

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The increase in construction costs resulting from the Strait of Hormuz blockade may strain an already overstretched global housing supply.

The disruption of the Strait of Hormuz and production facilities across the Gulf states’ economies over the last month has affected not only energy markets but also the production and transport of key construction inputs. Those impacts will linger long after the missiles stop landing and the drones stop flying. Indeed, it is far from clear if the strait will actually open for international shipping after the announcement of the Pakistani-mediated ceasefire on April 7. Following Israeli strikes on Lebanon, Iran has already ordered the strait to close again. 

Beyond fuel, global supply chains for aggregates—cement, sand, and petrochemical-based materials like plastics—are under strain. Petrochemicals are used to create the plastics used for insulation and piping. The Baltic Dry Index, a handy benchmark of global bulk trade costs, has continued to rise.

The closure of the strait, however temporary, has forced shipping........

© The National Interest