In a recession or depression, there are certain factors and points of information within the economy that can give insight into consumer behavior, spending power, and overall prospects of recovery. While some often (perhaps too often) associate the stock market performance with the health of the economy as a whole, it’s important to look at the small scale when considering the status of the everyman. When looking to get a sense of buying patterns and market confidence, there’s no better place to look than the real estate market.
Real estate gives great insight into the financial health of the common person in America. For one, nearly every adult lives in a building that they either rent, own, or contribute to paying for in some fashion. This reality means that we can judge based on the volume of spending on living spaces, as this is nearly always the financial first priority.
As the coronavirus outbreak gripped the country, many renters fell behind on their payments; in turn, mortgage companies took a hit. But as we’ve cleared the spring and moved into summer, more homeowners and renters made partial or complete payments in June than in April or May; that number is expected to grow as we move through the year.
Additionally, many home seekers have sought to take advantage of lower interest rates and falling prices; as such, home purchases are expected to rise from the drop induced by the pandemic. Sellers looking to get maximum value for their homes are faced with a saturated market; banking on pent-up demand can prove to be a boom-or-bust strategy.