flexiblefullpage - default
Currently Reading

If the Pandemic Triggers Recession, What Will Happen to Home Sales?

Advertisement
billboard - default

If the Pandemic Triggers Recession, What Will Happen to Home Sales?


March 16, 2020
Woman wearing a face mask
Image: stock.Adobe

It wasn’t a trade war or the fallout from Brexit that ended the longest bull run in the history of the U.S. stock market: It was the unforeseen impact of COVID-19. Even though the coronavirus has cancelled major sporting events, flights, and shutdown schools, bars, and restaurants, would a downturn, if there is one, caused by this pandemic, be worse than the Great Recession?

While it doesn't look like it will be business as usual anytime soon, home prices aren't expected to fall off a cliff and low mortgage rates may help buoy home sales. At least that's what experts are saying this week. But this is a fast-moving, unprecedented crisis, and no one knows yet how it will all play out.

If folks are worried about their jobs, and being able to pay their bills, they're less likely to want to buy a home. Ditto if they're nearing retirement and the stock market volatility wiped out a big chunk of their 401(k) accounts.

But that caution is likely to be at least partly offset by some of the lowest mortgage interest rates in nearly 50 years. They were just 3.36% for a 30-year fixed-rate mortgage as of Thursday, according to Freddie Mac.
"I don't know which force will be greater: the negative impact of job cuts, if that was to occur, or the positive influence of low mortgage rates," says National Association of Realtors Chief Economist Lawrence Yun.

Most housing economists don't expect housing prices to fall, since we're still seeing a housing shortage. There aren't enough existing homes or new construction to satisfy the high demand from buyers, many of whom have been looking for a home for a while and perhaps have lost bidding wars. After all, the life changes that lead people to buy a home are still ongoing: expanding a family or having kids leave the nest, or relocating for a new job.

Read More

Related Stories

Housing Markets

This City Dodged the 2008 Housing Market Crash, but It’s Bottoming Out in a 2023 Correction

The Lone Star State bypassed a 2008 home price crash, but it's now caught in the middle of a 2023 market correction

Market Data + Trends

Why a Growing Number of Americans Are Worried About a 2023 Housing Crash

A recent survey reveals mounting concerns about a 2023 housing crash, but housing industry experts aren't so worried

New-Construction Projects

Why New Rental Supply May Be Key to Lowering Mortgage Rates

Shelter inflation is taking the U.S. economy by storm. One way to lower housing costs is by building more apartments

Advertisement
boombox1 -
Advertisement
native1 - default
halfpage2 -

More in Category



Advertisement
native2 - default
Advertisement
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.


Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Subscribe
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.