Real Estate Memos: Despite financial hardships in the wake of COVID-19, there are signs of hope in the real estate market
We have had weeks of dreadful news about the economic repercussions of the COVID-19 pandemic. And while there have been slight improvements here or there, it's all pretty dark.
Recently, new claims for unemployment were more than 3.8 million. This only sounds good because the past six weeks' worth of claims have been significantly higher: around 30 million or about 18% of the workforce. Suddenly, economists are talking about 30% of the U.S. workforce being unemployed before the tide turns. Plus, millions more are experiencing pay cuts.
Unemployment claims for many have been held up due to outdated technology, stricter state rules about who can claim unemployment, and confusion about who can apply for what. The Federal Reserve Bank announced it was far from done supporting the post-COVID-19 pandemic recovery, and some economists are talking about 2022 as a recovery target. The stock market pushes ahead, waiting for all that cash from the Federal Reserve to filter into the far corners, down into consumers' pockets.
But if anyone doubted the idea that nearly 80% of Americans were living paycheck to paycheck before the COVID-19 pandemic, you only need look to the miles-long lines at food banks across the country. With majority of Americans unable to cover even a month of expenses, there is hurt aplenty.
For those able to get approved, mortgage interest rates hit their historic lows in the last few weeks, even as some mortgage lenders indicated they would tighten credit and financial resource requirements for approving loans. If you're thinking about refinancing, think about this: Rather than lose good customers, some lenders are offering the opportunity to simply lower the interest rate on existing loans, without paying additional fees. Ask your lender if this is an option before you start shopping around.
While the number of listings available is down significantly from a year ago, buyers are still making offers on existing homes and new construction. While that is nowhere near a normal spring market, at least that's a hopeful sign.
(Ilyce Glink is the author of “100 Questions Every First-Time Home Buyer Should Ask” (4th Edition). She is also the CEO of Best Money Moves, an app that employers provide to employees to measure and dial down financial stress. Samuel J. Tamkin is a Chicago-based real estate attorney. Contact Ilyce and Sam through her website, ThinkGlink.com.)(c) 2020 ILYCE R. GLINK AND SAMUEL J. TAMKIN. DISTRIBUTED BY TRIBUNECONTENT AGENCY, LLC.