- Current housing market and economy at best. “gloomy”
- 5 key indicators that housing market and economy on the rebound
The current state of affairs in the nationwide housing market is considered to be “gloomy” by all expert opinions. What was forecast to be a strong spring market almost instantly turned grey when the coronavirus pandemic hit.
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Because the only constant is change, the housing market will rebound. Here are five things to look for that will make your glimmers of hope brighter:
- The coronavirus curve will flatten. When that curve flattens or becomes negative, there will be fewer confirmed cases of this disease. Obviously, different states in different parts of the country will experience curve flattening at different times, almost as if the peaks and valleys of the disease are rolling waves in an ocean. Parts of New York State appear to have fewer confirmed COVID-19 cases walking into its respective hospital doors now just as parts of Chicago and New Orleans appear to have more COVID-19 cases inside its hospitals.
- Stay–at-Home orders will be lifted. Because COVID-19 thrives and spreads among people in close contact, most of the country’s governors have restricted people to their homes and limited the number of people allowed in groups to 5. Data shows that these stay-at-home orders and small group limitations have been working. The CDC announced this last week that rather than earlier projections of 100,000 – 200,000 deaths caused by this disease experts are now projecting some 60,000 deaths. Once stay-at-home restrictions are lifted, again on a rolling basis, we can expect our hugely populated economic machine and specific housing markets to slowly and steadily rebound,
- 10-Year Treasury Yield Going Above 1%. As usual, the country’s bond market will be the beacon for our economy and housing market recoveries. On the date our first positive coronavirus test was recorded, January 20, 2020, the 10-year Treasury bond stood at 1.56%. On March 9, 2020, the Treasury bond yield hit 0.32%. Now, on April 10, the yield stands at 0.73%. This 0.73% reading indicates that market experts anticipate that Q3 and Q4 of this year will be better than Q2. Once the 10-year Treasury yield hits above 1% and even goes up to 1.33%-1.6%, begin smiling.
- Jobless Claims and Credit Stress will begin declining. The number and rate of jobless people filing for unemployment insurance benefits are staggering. In just three weeks, some 17M filed for unemployment benefits. In just three weeks, over 3M people applied for mortgage forbearance plus credit sources for mortgage purchase applications completely dried up. Once these two crucially important indicators to the housing market and economy begin to fall, smile more broadly.
- When Hardest-Hit Business Sectors begin to trend upward, do handstands. Look to “non-essential” business sectors such as tourism, hair salons, retail and ridesharing to reflect “recovery.” The more people who go back to work in these businesses, the better for state and local governments and the better for the economy. Also, look to the housing industry, including sales, re-sales and construction, to offer a glimmer of light and hope. Again, these glimmers will be on a rolling basis as these highly negative, -11%-24%, declines begin to reverse themselves as pent-up demand kicks in.
Thanks to HousingWire.