Concerns about the country’s financial standpoint continue to come up daily now that everyone is thinking about the U.S. economy. The top question emerging is -when will the economy begin to recover? No one knows when the economic rebound is likely to happen, but expert economists are becoming aligned on when this will transpire.
Based on Economic Forecasting Survey from the Wall Street Journal, 85.3% believe a recovery will begin in the second half of 2020.
Chris Hyzy who is the Chief Investment Officer for Merrill stated they are fully expecting that the economy could begin to pick up in late June and July, then a strong recovery in Q4 of this year will follow.
Furthermore, five of the major financial institutions are also forecasting positive GDP in the second half of the year. Today, four of the five expect a recovery to begin in Q3 of 2020, and all five agree a recovery should start by Q4.
Leading economists, analysts, and financial institutions are all in agreement that the economic recovery should begin in the second half of 2020.
Everyone is so focused on the American economy at the moment. As it goes, so does the world economy. With states beginning to reopen, the question becomes: which sectors of the economy will drive its recovery? There seems to be a growing agreement that the housing market is positioned to be that driving force toward the necessary improvement.
Some may question that statement as they look back on the last recession in 2008 when housing was the anchor to the economy – holding it back from sailing forward. But even then, the overall economy did not begin to recover until the real estate market started to regain its strength. This time, the housing market was in great shape when the virus hit.
According to Mark Fleming, Chief Economist of First American, many still live with the effect of the Great Recession. People may be expecting the housing market to follow the same path in response to the coronavirus outbreak. But, distinct differences are showing that the housing market may follow a much different path. The housing market may have led the recession in 2008-2009, it may also manage to bring us out of it this time.
Every piece of sold property has an impressive financial impact on local economies. As the real estate market continues to recover, it will act as a strong tailwind to the overall national economy.
Almost everyone has been complying with the stay-at-home orders from our state and local governments for nearly two months now. This unexpected situation has put our daily lives on pause making us find comfort in spending time at home and feel secured from having a much-needed safe place to live.
According to the Housing Vacancy Survey (HVS), Americans place great value in homeownership and it is continuing to grow in the United States. The results provided by the U.S Census Bureau show that the homeownership rate rose to 65.3% for the first quarter of 2020. This is a number that has been rising since 2016 and is the highest rate obtained in eight years.
The National Association of Home Builders (NAHB) explained that a strong owner household formation with around 2.7 million homeowners added in the first quarter has made the increase of the homeownership rate, especially under the decreasing mortgage interest rates and strong new home sales and existing home sales in the first two months before coronavirus hit the economy.
The National Association of Home Builders (NAHB) also highlighted that the homeownership rates among all age groups increased in the first quarter of 2020.
Households under 35, who are mostly first-time homebuyers, have registered as the largest gains, with the homeownership rate increased by 1.9% from a year ago.
Households with ages between 35-44 have increased by 1.2%.
Households with ages between 55-64 have increased by 0.9%.
Households with ages between 45-54 have increased by 0.8%.
Households with ages over 65 have increased by 0.2%.
Homeownership has always been a great financial investment and an important part of the American Dream. The current situation makes many people feel more thankful for the home they get to share with their families. Coronavirus may be slowing our lives down, but it is showing us the emotional value of homeownership too.
Americans feel cynical about stock market investing due to the economic shock caused by coronavirus. 21% of Americans who think stocks or mutual funds are the best long-term investment is down by six points from 2019 and the lowest percentage recorded by Gallup since 2012. Real estate ranked first, followed by gold and savings accounts.
Since 2013, 35% of Americans say real estate is the most recommended long-term investment. And since 2016, over one-third of Americans have named real estate as the top investment.
Stocks and mutual funds remain the second most preferred long-term investment, despite the dip. Savings accounts or CDs (17%) and gold (16%) followed. Bonds lagged at roughly 8%.
Stockowners have also lost interest in stocks or mutual funds — with the percentage naming stocks dropping from 37% in 2019 to 30% now.
The results came from Gallup’s annual Economy and Finance survey that was conducted from April 1–14 among 1,017 U.S. adults.
High-income Americans believe stocks and mutual funds as the best long-term investment. However, the drop occurred among both high-income and low-income Americans, with a decline of nine points each from last year’s survey, while the percentage of middle-income respondents who chose stocks or mutual funds did not change.
The survey shows that the ownership of stocks is stable at 55% of Americans. But confidence among stock owners fell, with only 30% picking stocks and mutual funds as the best investment — down from 37% in 2019. And even after a decade of economic expansion and record stock market gains, the percentage of Americans that own stocks have not reached its 63% peak from before the Great Recession. A low was reached by 52% in 2013.
65% of high-income households said investing $1,000 in the stock market is a good idea, but 47% of middle-income households and 39% of low-income households agreed. Over half of stock owners believe the investment to be valuable, while the sentiment among non-investors hovered closer to a third.
Stocks appeal’ may have faded after the longest-running bull market in the U.S. history ended, they still ranked as the second most valued investment. However, the economic fallout from coronavirus could scramble Americans’ preferences as the stock market is at risk and the real estate market’s future is uncertain.