Why We’re Not Headed Toward A New Great Depression

Why We’re Not Headed Toward A New Great Depression


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Why The U.S. Is Not Headed Toward a New Great Depression

The Harvard Business Review believes the intensity of the Coronavirus shock has sparked unfounded fears. “The depth and speed of output contraction threatens to influence perceptions and risk assessment in other dimensions of this shock…While these fears are understandable, the analytical errors resulting from them could have significant consequences in terms of setting false expectations and encouraging inappropriate plans.”

In an article published last Friday, they used historical examples to illustrate the four paths that lead to a structural regime break on the level of the Great Depression. Ultimately, they concluded, “though the path from the crisis we’re in now to either depression or debt crisis is not impossible, it’s not easy or natural.”

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seasonally adjusted homebuyer demand index

Home-Buying Demand On The Rise But New Listings Lag

Last week, Redfin published an article looking at how rising homebuyer demand will affect the housing market as states begin to lift stay-at-home orders. We were encouraged to see that “home-buying demand took another step towards recovery, gaining strength for the third week in a row. After plummeting as much as 34% in March, home-buying demand is now down only 15% from pre-coronavirus pandemic levels.” Check out the article for their four big takeaways from the week. 

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Inventory Drops Lower As April’s New Home Listings Plunge

Fox Business reports that new home listings dropped 44.1% in April according to Realtor.com as sellers halted sales in order to” “see how market conditions play out.” Prior to the crisis, “the spring was expected to be the ‘hottest shopping season’ in years, powered by record-low interest rates, higher buyer demand and an increasing share of millennials entering prime first-time homebuyer age.” The article goes on to say, “The good news is that those underlying dynamics still exist to help fuel the housing market’s recovery from the virus outbreak.”

Check out the full article to learn more about the data coming out of the Realtor.com April Housing Market Trends Report.

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Americans flee crowded cities amid COVID-19

USA Today reported that nearly a third of Americans are considering moving to less densely populated areas in the wake of the pandemic, according to new data from Harris Poll. “People will be much more cautious about living in high-density areas with so many people nearby,” predicts Lawrence Yun, chief economist at the National Association of Realtors. 

As we mentioned in our article earlier this week, we think this could be welcome news to some landlords as tenants opt for roomier single-family rentals over jam-packed apartments. 

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