Posted by Apex Home Loans ● July 8, 2020

3 Signs the Housing Market Will Aid Economic Recovery Post COVID-19

Housing Market

Having second thoughts about buying a house in the next year? Fear not. The economic uncertainty propelled by Coronavirus is calling to mind the Great Recession, but the two events are fundamentally different. Here’s how – and the four signs that are showing us how housing will actually advance economic recovery rather than inhibit it post-pandemic.

  1. Predictions of a V-Shaped Downturn
    Where the Great Recession was the result of financial imbalances, today’s economic struggles are the result of an external force: COVID-19. Economists have studied the economic impact of epidemics historically and concluded that while there is no precedent for COVID-19, the downturn could be a lot shorter than the Great Recession – more like a V shaped downturn than a U. From a homebuying perspective, current fiscal policy is also resulting in low interest rates and little cost to borrowing.

 

  1. The State of the Housing Sector Pre-COVID-19
    Prior to COVID-19, homebuilders were scrambling to create inventory for booming demand. As Robert Dietz, Chief Economist with NAHB, explains: “the Housing Sector enters this recession underbuilt rather than overbuilt… That means as the economy rebounds – which it will at some stage – housing is set to help lead the way out.” As the housing market continues to be developed, unmet demand will be filled and bolster the market.

    “The Housing Sector enters this recession underbuilt rather than overbuilt… That means as the economy rebounds – which it will at some stage – housing is set to help lead the way out.”

 

  1. We’re Already Seeing Housing Demand Bounce Back
    As reported by CNBC and Forbes in recent weeks, buyers are willing, ready and eager to jump back into the market. While Governors’ definitions of “life-sustaining businesses” are making the process of buying a home challenging – if not impossible in some states – pent up demand is real and widely reported. Forbes’ discussion with top agents on this topic reveals that some sellers are wary, but industry veterans feel that the main thing holding back the spring housing market is its non-vital status.

 

The housing market is positioned to help aid economic recovery as we overcome the pandemic. In contract to the Great Recession, an external force is driving the economic downturn we are currently experiencing – a downturn from which many economists expect a rapid recovery. The housing sector is still in a development stage, a positive sign that is will help lift us through any downturn. High producing agents with boots on the ground are telling us that the American dream is still very much alive – and the pent-up demand exists to prove it.

 

Make sure you’re informed and ready when it’s time to make your homebuying dreams a reality. Connect with a mortgage banker today.

 

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Topics: Economic News, Housing Data, Housing Forecast, Housing, Housing Market

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