COVID-19

New home sales in August hit highest level since before Great Recession

David Brancaccio, Candace Manriquez Wrenn, Erika Soderstrom, and Alex Schroeder Sep 25, 2020
Heard on: Marketplace Morning Report
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Sales of new single-family homes rose 4.8% in August and surpassed an annual rate of 1 million for the first time in 14 years. Justin Sullivan/Getty Images
COVID-19

New home sales in August hit highest level since before Great Recession

David Brancaccio, Candace Manriquez Wrenn, Erika Soderstrom, and Alex Schroeder Sep 25, 2020
Sales of new single-family homes rose 4.8% in August and surpassed an annual rate of 1 million for the first time in 14 years. Justin Sullivan/Getty Images
HTML EMBED:
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With nearly 900,000 people signing up for unemployment benefits after fresh layoffs each week for the last three weeks, who’s buying houses?

Actually, lots of people.

There’s news that new home sales in August hit their highest level since before the Great Recession.

“Low mortgage rates are absolutely a factor,” said Danielle Hale, chief economist at Realtor.com. Today’s 30-year mortgage rates are hovering below 3% given the low interest rates caused by the pandemic.

Hale spoke with “Marketplace Morning Report” host David Branaccio about this, and the following is an edited transcript of their conversation.

Danielle Hale: With all the extra time at home, we do see a consistent trend toward people looking for more space. And that is usually easier to find as you get out to the suburbs. You’ll have extra space for maybe an office or a potential extra space for students to learn from home. The suburbs are definitely high up on the list because of that affordability factor.

David Brancaccio: You know, it’s just bizarre, though, right? We’re in a pandemic. I guess this fits into the picture of not a V- or U-shaped economic recovery. But what some are calling, I don’t know, a K-shaped recovery — one leg down for people who were laid off and this other leg up for people who kept their jobs who are profiting from assets like the stock market, and being able to get into a house.

Hale: Yeah, I think that’s a good observation. I think it’s worth pointing out, too, that new home sales broke the 1 million mark for the first time in 14 years. But this was also one-month activity. So some of what we’re seeing is make-up for a spring in which not very many home sales happened because people were stuck at home and not getting out and doing the things that normally happen in a really active, normal housing market in the spring.

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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