How will the coronavirus pandemic impact the spring market? Unemployment claims, mortgage rates and home buying activity in the spring of 2020.
It’s been another week of dreadful news about the economic repercussions of the COVID pandemic. And, while there have been slight improvements here or there, it’s all pretty dark.
How Will the Coronavirus Pandemic Impact the Spring Market
New claims for unemployment were more than 3.8 million, which only sounds good because the past six weeks’ worth of claims have been significantly higher. Around 30 million Americans are out of work over the past 6 weeks, 20 percent of the roughly 150 million in the workforce. Suddenly, economists are talking about 30 percent of the U.S. workforce being unemployed before the tide turns, which would mean around 45 million Americans would be unemployed, let alone millions more who are experiencing pay cuts.
Unemployment claims for many have been held up due to outdated technology, stricter state rules about who can claim unemployment and confusion about who can apply for what. The Federal Reserve Bank announced it was far from done supporting the post-COVID pandemic recovery, and some economists are talking about 2022 as a recovery target. The stock market pushes ahead, waiting for all that cash from the Federal Reserve to filter into the far corners, down into consumers’ pockets.
But if anyone doubted the idea that nearly 80 percent of Americans were living paycheck to paycheck before the COVID pandemic, you only need look to the miles-long lines at food banks across the country. With the majority of Americans unable to cover even a month of expenses, there is hurt aplenty.
Mortgage Interest Rates and Home Buying Activity
For those who are able to get approved, mortgage interest rates hit their historic lows in the last few weeks, even as some mortgage lenders indicated they would tighten credit and financial resource requirements for approving loans. If you’re thinking about refinancing, think about this: Rather than lose good customers, some lenders are offering the opportunity to simply lower the interest rate on existing loans, without paying additional fees. Ask your lender if this is an option before you start shopping around.
While the number of listings available is down significantly from a year ago, buyers are still making offers on existing homes and new construction.
While nowhere near a normal Spring market, at least that’s a hopeful sign.