Unemployment remains high
This Isn’t the 2008 Real Estate Crisis
A big reason for that is because the housing market has been underbuilding and unable to keep up with population demand since 2009. The country is undersupplied by an estimated 2.5 million housing units.
Further, owners have accumulated a great deal of equity in their homes over the last decade—and still-rising home prices are only adding to that.
Deferred Sales Unleashed, But for How Long?
In recent weeks, mortgage applications for home purchases have posted a strong rebound, even surpassing levels well beyond what they were a year ago. Record low mortgage rates are enticing buyers who had been waiting on the sidelines prior to the pandemic to make a move as well as motivating renters,
Here are some additional housing indicators
Home prices stand firm. Home prices are rising, but growth is expected to moderate over this year and next. However, economists are not predicting any declines in home prices. The National Association of REALTORS® is projecting home prices to be up about 4% in 2020 and 2021; CoreLogic and Freddie Mac’s forecasts are more subdued but still have home prices rising at about 2.5% in 2020 and 2021. So far, home prices have not gone down during the pandemic and actually have increased. “This really speaks to the lack of inventory on the market,” Khater said. “It’s still a seller’s market—even in the worst recession since World War II.”
Personal income is rising. Despite surging unemployment numbers, incomes are rising.
Foreclosure waves are unlikely. Homeowners—at least so far—seem to be much less impacted by the recession.
