A Silver Lining for Future Homeowners During COVID-19
During the COVID-19 crisis, we must remember that our emotions can impact our personal finances even more than our pragmatism. There’s a lot of white noise out there, so if you’re watching the news, you might be thinking that our economy is crashing and burning, with no return in sight.
However, the truth is that economies are cyclical, and no matter how good the good times are, the forces of nature, politics, and supply and demand will eventually wreak havoc on our wallets in the same way that they once filled them.
Right now, many of us have been put out of work against our will and need to sit and wait for the storm of COVID-19 to pass. That said, we should try to see COVID-19 in a new light. No doubt, many are incredibly stressed, both worried about their health and their income. But it’s important for us to remember that this situation was caused by a virus and not by bankers (as was the case with the 2008 crash). This means that our previously strong economy is providing some padding for our economic crash-landing.
China’s Economy: a Reflection of What’s to Come
Without a doubt, COVID-19 has caused us to reevaluate what’s most important: our families, our health, our friendships, and of course, our future. As a country, we’re all doing some soul-searching. But as you search, keep in mind that the economy will reopen again, and when it does, it’ll be a flood of work as bizarre as this drought.
China is an excellent indicator of what’s to come. Despite months of stagnation, the Chinese economy is slowly but surely rising from the ashes. Although life has not returned to normal completely, jobs are up and running, no longer restricted by the previously intense measures of self-isolation.
This isn’t to say that social distancing is no longer necessary. It’s well known that COVID-19 will alter our day to day operations indefinitely. But the silver lining is that if a country like China—whose economy was already weakened by a trade war—can rebuild itself, then so can we.
At the Crossroads
Granted, the United States is the country with the most confirmed infections in the world, so it’s difficult to say how and when we’ll fully reopen our economy. However, one thing is true: our economy is restructuring itself.
Farmers, restaurants, hospitality workers and gig economy workers are all scrambling to fit into this new system of working while social distancing. Jobs that once required an office presence can now be done remotely, and many are ordering groceries from local farms directly in order to avoid crowds at the supermarket. In the face of this virus, we are learning to be more flexible in order to better adapt to the obstacles that are coming our way.
A Silver Lining for Future Homeowners
As we’re all indoors, our creativity is skyrocketing, mainly due to our intense boredom and stress. And as you imagine all the things you’ll do and all the people you’ll see once this is over, I want you to think further than a handshake or a hug—entertain a whole new life for yourself. That’s right, I’m talking about becoming a future homeowner.
You’ve probably seen all the memes online of people rubbing their hands together diabolically with the caption “millennials waiting for the housing market to crash”. People are joking, but they’re also watching very carefully, and reassessing how they can find security in the midst of this chaos.
Things are not ideal. If mortgage liquidity continues to stall, Fannie Mae and Freddie Mac will be forced to ask Congress for financial intervention. However, it’s also not the worst time to buy a home or think about becoming a future homeowner.
Remember that there’s a moratorium on mortgages at the moment, and the ones who will be on the hook aren’t borrowers, but lenders. While you still have to qualify for a loan and be able to afford your mortgage, you’re also afforded some leeway for the moment, which is more security than renters have.