Housing Could Be the Leader in the Post-Pandemic Economy
Heading into the pandemic, North Texas’ housing market was seeing record sales and rising prices. And when the worst of the COVID-19 economic downturn is past, the home market could be one of the best parts of the Dallas-Fort Worth and statewide economy, a top real estate economist predicts.
“Housing could be well be the leader in bringing the rest of the economy up out of the doldrums,” Dr. James Gaines, chief economist at the Real Estate Center at Texas A&M University said. “We are going to have historically low interest rates that could boost the market. Housing could well be one of the leading industry sectors that gets us out,” he said. “Home construction will come back - I think it will be prime recovery activity.”
Gaines, on a conference call, told members of the MetroTex Association of Realtors that the outlook for this year’s housing market was strong before the virus shut things down. “We expected 2020 to be a good year, but now all bets are off,” he said. “March is probably going to be the last good month for housing for a while. April and May are probably going to be way down.”
Home buying, while significantly reduced, hasn’t completely stopped, he said. “There is going to be activity – it’s not going to go away altogether,” Gaines said.
Gaines said with many homebuyers and sellers sitting out the pandemic, purchase activity could bounce back later this year. “There is going to be some pent-up demand,” he said. “Typically, we would be right in the middle of the busy buying season here in April, May and June. It may be July, August and September will be our best months of the year,” Gaines said. Before the pandemic, there was already a shortage of housing in D-FW and other markets. With fewer homes coming on the market, the lack of homes to buy is likely to get worse.
Of course, a rebound in home purchases is also dependent on if the millions of people who’ve been laid off and furloughed go back to work later this year. Mortgage lenders have been raising their credit requirements because of concerns about the economy. “The lenders are getting nervous,” Gaines said. “They are making the loans tougher – a little tighter...”
