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Homebuyers Boost Recovery of Multiple Sectors

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Economics

Homebuyers Boost Recovery of Multiple Sectors


July 17, 2020
Woman shopping for home furnishings
Photo: Kittiphan

Previously pent-up consumers are reaping the benefits of historically low interest rates, and fueling the economy by doing so. The car industry has seen it too: low, low sales at the beginning of the pandemic have flipped and auto sales exceeded their summer expectations. When purchasing a home, a buyer will naturally spend money on furniture, supplies, and items like gardening equipment, helping to fuel the broader economy. If COVID-19 cases continue to rise in states rolling back their reopening plan, employment and consumer spending abilities will be dampened, according to Realtor.com.

Consumers have continued spending on big-ticket items such as vehicles and homes during the coronavirus pandemic, helping support the U.S. economy as it battles a surge in cases and renewed business shutdowns.

Historically low interest rates are luring in auto and home buyers, many of whom have higher incomes and firmer job security than low-wage, service-sector workers hardest-hit during the recession, economists and industry experts say.

“Looking at the car sales, looking at the retail activity, looking at the housing data, it has been pointing to a really bigger recovery story,” said James Knightley, an economist at ING Groep NV. “If you’ve got a job and feel pretty secure and you see your equity holdings rise in value, you’re probably still feeling pretty good.”

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