What have you always wondered about the economy? Tell Us
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:
HTML EMBED:
COPY
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
Heard on:
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:
COPY

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

What’s the outlook for vaccine supply?

Chief executives of America’s COVID-19 vaccine makers promised in congressional testimony to deliver the doses promised to the U.S. government by summer. The projections of confidence come after months of supply chain challenges and companies falling short of year-end projections for 2020. What changed? In part, drugmakers that normally compete are now actually helping one another. This has helped solve several supply chain issues, but not all of them.

How has the pandemic changed scientific research?

Over the past year, while some scientists turned their attention to COVID-19 and creating vaccines to fight it, most others had to pause their research — and re-imagine how to do it. Social distancing, limited lab capacity — “It’s less fun, I have to say. Like, for me the big part of the science is discussing the science with other people, getting excited about projects,” said Isabella Rauch, an immunologist at Oregon Health & Science University in Portland. Funding is also a big question for many.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

Read More

Collapse

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.