There’s no shortage of bad news when it comes to the economy and the housing market. But that’s no surprise considering the circumstances.
The sheer size and speed of the economic contraction makes it easy to worry about what the future will look like. Has coronavirus changed things forever? Is it true that many jobs have been permanently destroyed?
I don’t know. No one can really know. Many of the more troubling questions won’t be able to be answered any time soon. No one can deny things are bad and that some things may stay bad for a long time.
But hidden amid the understandable sea of pessimism, there are some reasons for hope. We’re not talking about the kind of hope that makes us complacent to the ongoing economic risks. Rather, there are simply some positive counterpoints to the abundant negativity in the recent data. Let’s look at both sides!
April’s Existing Home Sales numbers were released on Thursday, and they easily fell to the lowest levels in years. There’s not much of a silver lining here apart from the fact that economists expected the number to be even lower.
The Existing Home Sales report doesn’t capture activity in new construction. For that, we have to turn to other data released this week on new building permits and housing starts (the ground-breaking phase of new construction). Here too, things are quite a bit weaker, but the differences between “starts” and “permits” offer a clue. Specifically, the bigger drop in housing starts suggests quarantine measures are physically preventing new home construction to a greater degree than a lack of demand. (read our complete post)