- COVID cases currently going through the roof in most parts of country
- Two factors may keep housing market from plummeting as it did during first nine weeks of pandemic outbreak
This current resurgence in COVID cases coupled with restrictions to combat virus spread being reapplied could well impact the housing market negatively in the short term. Rather than the year-over-year purchase application growth of 20% we’ve been seeing for 25 weeks, it’s likely that y/y growth will moderate this month and into December.
There are two factors that may hold market growth at a moderate level instead of market growth simply plummeting as it did in March and April.
First of all, we’ve seen this movie before. We now have some experience in dealing with our business lives as well as our personal lives during this COVID pandemic. We’ve gone remote: we’ve learned much more about communicating with our clients and potential clients via technology plus we’ve become much more comfortable doing so; we’ve learned much more about and become more comfortable with video tours and video chats. We could go on and on here but the bottom line is we’ve faced this reality before and we now have the strategies, experience and confidence to deal with this reality without completely panicking.
Second, COVID testing is more available, treatment protocols are much better informed and therefore more operative, AND safe, effective vaccines are on the way.
On top of these two factors, we have a continuing low interest rate environment and we have a massive group of 26 – 45 year olds who may well soften any housing market downturn caused by COVID-19. Though certainly not perfect, unemployment rates have gone from 14.9% to approximately 7% and we’ve recaptured some 50% of the nearly 23M lost jobs in April and May.
Will Congress FINALLY do its job and pass more and adequate disaster relief to businesses small and large, to the millions of people in dire need of assistance, to city and state governments that have been decimated by this virus and to schools so they can actually afford to provide safe, on-site learning for all ages of students? Unlikely until after the presidential inauguration.
Thanks to HousingWire.