Will the Pandemic Ignite a Surge in Homeownership?
With the rampant layoffs, pay cuts, and financial turmoil, the pandemic sparking an increase in homeownership may sound like a joke, but real estate experts say that it may do just that, according to Forbes. Though the economic blows to Americans are steep, analysts say that the pent-up demand and antsy Millennials cooped up in apartments may lead to an initial increase in homeownership after the pandemic. But the homeownership rate may not indicate an actual rise in the number of households in the U.S. Instead, renters may be moving back in with family or living with friends to cut down on expenses.
While economic slumps typically depress home buying and owning, the current coronavirus-triggered slowdown could buck conventional wisdom and lead to an increase in the U.S. homeownership rate.
Prior to the onset of the COVID-19 outbreak, which largely shuttered the economy in mid-March, the homeownership rate stood at 65.3% for the first quarter of 2020, marking a 1.1% increase from a year ago. In the last three months of 2019, the rate – at 65.1% – exceeded 65% for the first time since the end of 2013.
“Before this pandemic hit, we had one of the strongest three months of home buying activity across all ages and sectors,” said Lesley Deutch, principal with John Burns Real Estate Consulting. “Really, the industry was about the strongest it has been since the last downturn.”