How will COVID-19 impact the national housing market?
Take-aways from Chief Economist, Matthew Gardner
- Expect a 10% -15% contraction in the number of home sales for 2020
- Contraction is anticipated to be brief and pick back up quickly
- Qualification and financing is going to more achievable than ever
- Low supply in new construction, but households are still being created which puts upward price pressure on housing stock
- Mortgage Interest Rates continue to remain extremely low and are expected to remain low
- Buyers are influenced by the economy and with 70% of the US economy being influenced by consumption and the stock market declining, buyers concerns of job security arise and the option to obtain a down payment from selling stocks is limited
- Take Action: Buyers, look for lending options that offer achievable money down and doesn’t create a risk for leveraging stocks or completely deplete savings during this uncertain time. Leverage the low interest rates while they last and understand how a decline in interest rates can significantly change your monthly mortgage, making home ownership more achievable in the long term.
- Inventory may drop as, depending on market, sellers may be hesitant to list
- Sellers may be cautious to open their home to potential buyers
- Take Action: Discuss virtual safe tours with your agent to keep your listings moving and buyers looking.
- Will we experience a recession in 2020? Yes, if the economy continues to see a shirk through Q3.
- How long will it last? Because there is nothing systemically wrong with the market, if a recession occurs, it will be a short term impact.
- The economy is expected to recover and to be much healthier than in the second half of 2020 than what is experienced in the first half.
- Note – A recession is two or more quarters during which the economy shrinks.
Most importantly! Order take-out, get coffee to-go, buy gift cards and find every opportunity to continue to support your small businesses and stimulate the overall economy. Action now will lessens the impact when we fully recover from COVID-19.