Housing Market Roars Back to Life Despite Pandemic’s Economic Fallout
With unemployment high and the economy unsteady, one would think the housing market wouldn’t be looking too hot right now. But surging housing demand is causing economists and home builders to rethink how the pandemic will affect sales, supply, and prices, according to Bloomberg. Though home builders may still be cautious about overbuilding in case the economy takes a nosedive again, buyers are ready to move now, which is keeping home prices steady. What the future will bring the housing market is still unclear, but for now, it’s looking brighter than it has in months.
No matter how you look at it, the economic fallout from the coronavirus is going to be brutal, with a projected 6.5% decline in real gross domestic product in 2020 and an unemployment rate of 9.3% at year-end, according to the Federal Reserve. In ordinary times, and without any policy response from government, a blow of this magnitude should weaken the housing market.
Yet, what we're starting to see is the very opposite. For various reasons, the supply of homes on the market continues to fall to record lows and home prices are, if anything, accelerating. For many homeowners stressed about the value of their biggest investment, it's a welcome relief. But this signals one more hurdle for would-be millennial homebuyers as they age into their family-forming years.