Key Highlights
– Economists projecting housing slowdown was temporary
– In reopening states, mortgage applications jumped +11% in one week
– Buyers appear more ready to buy than sellers willing to sell
April was not a good month for the country’s bottom line. A total of more than 36M people have filed for unemployment since the COVID-19 crisis began in the US, retail sales dropped a record -16.4%, and, despite the stock market having its biggest rebound since the 1930’s, the turbulence professional investors had been cautioning the public about came to pass.
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In the midst of all of that bad economic news in April, existing home sales plummeted some 30%-40% depending upon location.
Will May be better than April for the housing market? Current lower than low interest rates are certainly helping homebuyers buy and homeowners refinance existing mortgages. Reopening states where potential buyers could be able to see listed homes in real time were the impetus for purchase mortgage applications rising some +11% during the first half of May. Consumer sentiment also rose during the first half of May, according to the University of Michigan’s index, and new home sales brightened with an+18% bump.
Since housing makes up some 18% of the nation’s gross domestic product (GDP), all of these light glimmers nudge the economy forward into more positive directions. Hopefully, the on-its-way monthly report from The Conference Board will bring relatively good news about consumer expectations for business conditions and good news about metrics for new housing building permits.
The COVID pandemic has and continues to swamp the economy as well as the housing market but it’s important to keep your mind and your actions focused on what’s coming next even if that “next” is uncertain. Keep preparing yourself and your clients for the long-term. If the economy is already a recession economy, some believe that the worst has already happening and that both the stock market and housing market are already rebounding.
Remember…economic downturns often benefit long-term investors, long-term investors who have the cash assets to seize real opportunities in real estate.
Thanks to grow.acorns.
Also read: Will Another “Big Shoe” Drop in July/August?, Record Declines in Home Sales & Listings in April, Money Still Available in 2nd Paycheck Protection Program Funding
