What is the COVID-19 economic downturn’s effect on homebuilders?
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Housing makes up roughly 15% of economic growth in this country, so homebuilder optimism or pessimism can offer some clues about how the overall economy is faring.
New survey data on Wednesday from the National Association of Homebuilders shows builder confidence fell the most ever in a month, to 30. Anything below 50 is considered negative, and this is the first negative reading in more than five years.
On Thursday, new home construction figures for March will come out. It’s no wonder home builders are feeling pessimistic.
“We looked at communities that were both selling in February and selling in March. We matched up their sales rate and saw a 50% drop, nationwide,” said Ali Wolf, chief economist with the housing data and consulting firm Meyers Research, which tracks thousands of new developments around the country.
Building has also slowed. Many states have designated construction workers as essential, so they can keep showing up on job sites. But Wolf says they still have to comply with social distancing rules, so builders may have to stagger the masons, electricians and plumbers.
“The builders can only send in one trade at a time when normally they would have multiple in there. So this is starting to delay how long it takes to build a home,” Wolf said.
Jeff Caruso, CEO of Caruso Homes in Maryland, says his company is allowing no more than five workers outside a house, no more than three inside a house and no more than two per truck.
“We also have designated people in our company that are literally going job to job and making sure that everybody’s following these rules,” Caruso said.
Caruso says his sales are down probably 80% so far this month, partly because mortgage lenders have tightened their credit standards.
With help from a loan from the Small Business Administration’s Paycheck Protection Program, he’s hoping he won’t have to let any workers go.
COVID-19 Economy FAQs
New COVID-19 cases and deaths in the U.S. are on the rise. How are Americans reacting?
Johns Hopkins University reports the seven-day average of new cases hit 68,767 on Sunday — a record — eclipsing the previous record hit in late July during the second, summer wave of infection. A funny thing is happening with consumers though: Even as COVID-19 cases rise, Americans don’t appear to be shying away from stepping indoors to shop or eat or exercise. Morning Consult asked consumers how comfortable they feel going out to eat, to the shopping mall or on a vacation. And their willingness has been rising. Surveys find consumers’ attitudes vary by age and income, and by political affiliation, said Chris Jackson, who heads up polling at Ipsos.
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
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