As we re-open the economy which sectors of the economy will drive its recovery? The consensus is the housing market.
In an earlier blog we pointed out why this is not like the recession in 2008 when housing was the crisis. But even then, the overall economy did not begin to recover until the real estate market came back. Now, the housing market was in great shape when the virus hit.
Last week, Dr. Frank Nothaft, Chief Economist for CoreLogic, (@DrFrankNothaft) tweeted:“For the first 6 decades after WWII, the housing sector led the rest of the economy out of each recession. Expect it to do so this time as well.” And, Robert Dietz, Chief Economist for the National Association of Home Builders, in an economic update last week explained: “As the economy begins a recovery later in 2020, we expect housing to play a leading role. Housing enters this recession underbuilt, not overbuilt…Based on demographics and current vacancy rates, the U.S. may have a housing deficit of up to one million units.”
Every time a home is sold it has a tremendous financial impact on local economies. As the real estate market recovers and gets stronger, so will the rest of the country.