The world continues to suffer from the COVID-19 pandemic which has crippled the economies of several countries. Thousands of individuals within the United States lost their jobs while others moved to work remotely. Several industries have struggled and faced losses, whereas others have managed to emerge out of this pandemic stronger, for example, the housing industry.
In his article 'More Space, Please: Home Sales Booming Despite Pandemic, Recession', Chris Arnold discusses the various factors that have contributed to the rising sales in the housing industry despite the ongoing crisis. The housing industry saw a steep decrease in sale from mid-February to late May. In June, however, the sale of existing homes rose by 20% Although this seems like a huge increase, but in my opinion this percentage tells us nothing. There was an increase of 20% from the previous month but when we look at the numbers, we see that the actual numbers are lower than what they were pre-pandemic.
In July, there was a 25% increase in sales, and the numbers were higher compared to those in the pre-pandemic world. We clearly see an increase in the number of houses being bought. The reason behind this rapid drive are low mortgage rates (which are continuing to drop).
Despite the historically high unemployment and an uncertain outlook for the economy, the housing market is recovering.
https://www.npr.org/2020/08/28/906725372/more-space-please-home-sales-booming-despite-pandemic-recession/
5 comments:
Your post was very interesting to read, I did not know that house sales were booming, I think we would all expect the contrary due to the pandemic but I believe low mortgage rates definitely account for higher sales and maybe even just people wanting to acquire new space as being in lockdown during the past few months made us all realize the importance of our homes to work remotely.
It makes sense that the market is booming thanks to how easy it is to get a loan and have low interest rates are right now it really is a buyers market. kind of ironic that in the last economic trouble the housing market was the cause and now its one of the only market that has been affected positively.
I think it is interesting that sales are going up, but it makes me wonder if bankruptcies may also increase this year and most likely the next one as well. I know many businesses have filed for bankruptcy during this pandemic, but the increase in home sales may lead to more bankruptcies for individuals if the pandemic cuts off their source of income or makes the source unsteady.
Great analysis of the past data. I have definitely noticed the current trend with the housing market. Houses up for sale now are going like hot cakes! People are definitely taking advantage, like they should if they are able, of the low mortgage rates. It is important to realize that not all jobs were impacted by this pandemic so not everyone is in a poor financial situation. Also, the low mortgage rates are the key to making buying a house more accessible to more people who couldn't necessarily after it pre-covid. Overall, people taking out loans is a positive sign in the recovery of the economy.
This is definitely an industry worth looking at considering the last time it crashed it brought the whole economy with it.Like you said, with mortgage rates being lowered, people are taking advantage of this and are buying homes while they still can. Even though unemployment might be an issue, during this pandemic people who have been laid off have received a lot of government aid. Ultimately, once this pandemic is over, jobs will be created and people are taking advantage of the housing market in the meantime.
Post a Comment