America Is Getting Back To Business
When the coronavirus pandemic reached the shores of the United States in 2020 there was a lack of clarity about what it would mean for us. At first, some states went into lockdowns that were only supposed to last two weeks. Shortly after, those lockdowns were extended indefinitely. Soon it became apparent that nobody knew how long it would last or what its impact would be on our nation. A little over a year later, the pandemic is still with us and things have not returned to what we would think of as pre-pandemic normal. However, the strict lockdowns are easing and we are moving on as a nation. Even though the pandemic is not quite stamped out, it is clear that America is getting back to business. This is great news for an already hot real estate market.
Getting Back to Business Without Being Back to Normal
Many parts of our nation are getting back to business in large part to our efforts to control the spread of the coronavirus. As of today, every person in the United States who is 16 or older is now eligible to get one of the coronavirus vaccines. This is a significant market because it means we have the necessary supply of vaccines to treat everyone and that the most vulnerable have had a chance to get their doses. As of today, half of all adults in the United States have received at least one dose of the various vaccines. These numbers are incredible and are a testament to American ingenuity and resolve. The available vaccines were developed in record time. Typically, it takes about a decade to research, develop and approve a workable vaccine. We were able to develop a number of vaccines in under a year. That is incredible!
Our nation’s herculean effort to get this virus under control means that many places are now getting back to business. Some states have already completely opened up, such as Florida and Texas. What is more shocking, however, is that some of the states with the strictest lockdowns are eyeing a return to pre-pandemic business. California was the first state to usher in strict lockdowns to control the pandemic. Their plan, as of now, is to fully reopen the economy on June 15th. While mask restrictions will still be in place, their plan is to allow all businesses to open up without occupancy restrictions. Nevada, which is a state that closely followed California’s mitigation plans, has set June 1st as their date to fully reopen. Taken as a whole, states on all ends of the lockdown spectrum are setting their sights on a full return to business.
Getting Back to Business Boosts the Economy
It should go without saying that opening up businesses to pre-pandemic levels is good for an already growing economy. Overall, there is a slew of good news for the state of our nation’s economy. Key indicators are showing upward trends in spending, manufacturing, and hiring. As states reduce restrictions, more and more Americans are returning to work. Not only are people returning to work, but they are returning to stores, restaurants and other entertainment venues. People are making money again and this is getting reinvested back into the economy. These positive trends are causing economists to rethink their economic forecasts. As of now, the U.S. GDP is expected to grow by 5.7% in 2021. This is fantastic given that some economists were predicting a decade-long recession at the beginning of the pandemic. Americans are getting back to business and the entire economy is booming because of it.
Getting Back to Business is a Boon for Real Estate and Homeowners
The positive economic news is great news for homeowners and an already red hot real estate market. One of the scariest predictions circulating at the beginning of the pandemic was that it would cause the housing market to collapse similar to 2008. In a vacuum, these predictions made sense. Many were concerned that lockdowns would shutdown whole industries, which would cause unemployment to skyrocket. As a result, millions of Americans would fall behind on their mortgage payments. Eventually, these mortgages would go into forbearance and would eventually result in foreclosures. A wave of foreclosures would have been the final domino in a housing market collapse because the supply of homes on the market would crash prices. Thankfully, that did not happen.
Instead of the housing market collapsing, it took off like a rocket. There were a number of factors behind the real estate boom of the past year. Mortgage rates dropped to historic lows during the pandemic and have continued to remain near those levels. Rock bottom mortgage rates created a huge demand for those wanting to become homeowners. Low mortgage rates can save you a lot of money over the life of your mortgage. Homebuyers recognized this fact and rushed to purchase new homes. At the same time, efforts by the government worked to keep the supply of homes from exceeding demand. Foreclosure moratoriums and forbearance extensions were created to give those who lost their job some relief on their mortgage payments. Additionally, Americans were given multiple rounds of stimulus checks that helped them catch up on their bills. All of this created a recipe for a real estate renaissance.
Getting back to business means that the real estate market should keep humming along and homeowners should continue to reap the benefits. Even though forbearance numbers shot through the roof as Americans fell behind on mortgage payments, today’s numbers are positive. The number of mortgages in forbearance have been on a steady decline as many are catching up on mortgage payments. This trend should continue as more Americans go back to work and companies start to increase hiring because of consumer demand. As long as forbearance numbers continue on this downward trend, there should not be a risk of a foreclosure crisis. In turn, the housing market will not be flooded by new homes and prices will remain high. This might be bad news for anyone hoping to take advantage of declining home prices. However, this is incredible news for homeowners who have seen their home equity increase dramatically.
Final Thoughts
The pandemic is not completely over, however, America is getting back to business. While we are still not back to pre-pandemic normal, the storm clouds are parting and the sun is shining. Today’s pandemic and economic news is welcomed for homeowners. Worries about a housing market crash now seem to be well in our rearview. Instead, homeowners are looking forward to a world where the value of their homes continue to increase. This is also great news for home buyers. If you have not already taken advantage of today’s low mortgage rates, you can still do so and feel confident in the strength of today’s housing market. Buying a home today still means building wealth for tomorrow.
If you are still looking to take advantage of the scorching hot real estate market and want to buy a home, contact us! Our team of professional mortgage brokers can give you a complimentary, no-obligation mortgage qualifier to see how close you are to owning a home. Peoples Choice Mortgage works with hundreds of lenders to find a mortgage option that is perfect for your needs and financial situation. The only bad news about today’s good news is that it means that mortgage rate increases are likely on the horizon. So, don’t delay and contact Peoples Choice Mortgage today!
