As the coronavirus pandemic continues to rage on, the unexpected upward trend in sales of single-family homes is finally declining after four consecutive months of consistent increases.
While the ongoing pandemic had a detrimental effect on most industries, the rise experienced by the housing market was supported by low mortgage rates and the demand for more room, particularly due to the extended periods of lockdown experienced by U.S. families.
Last week saw a steep rate of single-family homebuilding and permits that was last experienced in September of 2007. However, a report released by the Commerce Department on Monday showed a 3.5% decrease in home sales this month.
Despite the recent downslope of sales, the housing market remains booming as of late due to several macroeconomic reasons. Since the start of the COVID-19 pandemic, Americans have been on a search for more space in their homes, as well as more space outdoors. This led to widespread migrations from densely-populated urban centers to the lesser-populated suburban areas.
On the other hand, this is less surprising than one would think. The majority of the financial strain and unemployment caused by the coronavirus pandemic affected low-wage workers, who are typically young and renters. This is in stark contrast to wealthy homeowners who were significantly less affected, and thus were more capable of purchasing new properties.
