As we move forward, the pandemic is dominating the public eye less and less. Even though COVID may not be in the news as it once was, its lasting effects are sure to be felt for the foreseeable future. Many young adults feel as if the pandemic has aged them, causing them to take steps towards milestones that they didn’t anticipate a year ago. One of the most common milestones is a shift toward homeownership.
Although the pandemic led to increased unemployment and poor economic outlook, millennials weathering the pandemic who held stable positions have saved money that would have otherwise be spent on entertainment. Stay-at-home orders keeping people housebound led many to the realization that their current home isn’t the one that’s best suited for them. These facts combined with the current record low mortgage interest rate have increased homeownership.
Working from home, the “new normal”, has caused many people to view location differently. Remaining in proximity to their employer’s office is less of a consideration. This results in looking for homes in safer, warmer areas with lower cost of living such as the South and Southwest. Cities such as Austin, Texas and Salt Lake City, Utah are experiencing a large increase of new inhabitants. Some major metropolises such as New York City and Philadelphia that have seen a boom in population since before the Great Recession in 2008 are now seeing their growth begin to decline. Some major areas that have seen lower rates of unemployment such as Washington D.C (8.6%) have been much more resilient than cities with high unemployment like New York City (20.4%) and Los Angeles (19.5%).
With interest rates low and many able to save enough for a down payment, the market has been favorable to the seller. But what about those searching for a new home that aren’t looking to buy a preowned home?
In 2008, new home builders were faced with a market shift that wouldn’t recover for the next 10 years. Surprisingly in 2020, the new home market recovered in just 10 weeks.
Even though the market recovered quickly, there are many issues that builders are still facing today. As an essential business, construction never came to a complete halt, but Project Managers now had to work with nervous clients that may show apprehension towards meet with them in person or to have others in their homes. Twenty-three percent (23%) of surveyed home builders experienced shortages of materials leading to violations of due dates that had been established in contracts prior to the start of the pandemic.
With each new day we are taking positive steps towards normality but no matter who you are, the changes Covid has caused are long reaching!