New Home Sales and Post Covid Life

Here is a quick bit of news to inform how you look at investing and personal finance moving into a post-Covid world.

New Home Sales Rise

New home sales were up 19% annually. That is much more than predicted by analysts.

There are few trends pushing the higher home sales and those same trends are worth noting across your investing.

new home sales economy
  • Covid knocked down the home buying market to basically zero, as showings were banned.
  • Covid also made people more conservative and protective of their finances. Staying put seemed easier and less risky than trying to move.

But…

Now, as things move toward a post Covid mindset, buyers are looking for new homes. However, there is a very low supply of existing homes on the market, so one of the easy ways to buy a house is to buy new. That means that what existing homes do go on the market are selling for asking price or higher, and selling quickly because of all the demand. This is good news because that experience will lead others out of their cocoon to sell.

This news obviously helps home builders, although that still remains a very risky investment.

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And, this is the most important thing… buyers are willing to spend money. That’s a key to recovering the economy as businesses, especially restaurants open up. The coming stimulus should save the economy from a downturn, or malaise, but there needs to be something that keeps it going once the new stimulus wears off. That something needs to be consumer spending. Higher home sales suggest that higher customer spending just might be there when we need it.

Market Analysis

The economy is still very fragile, and the stock market is priced to nothing going wrong, and everything coming back online post-Covid. That is good news for investors, but the slightest hiccup could pop the whole thing. We need to get through the summer with no market-shaking events to make this a real rally.

About the Author

By Brian Nelson – Brian is a former Certified Financial Planner and financial advisor. He writes for the Finance Gourmet and other financial publications. The material provided on this website is for informational use only and is not intended for financial or investment advice. At the time of publication, Mr. Nelson did not own any securities mentioned above, however, that may change at any time without notice. ArcticLlama, LLC, FinanceGourmet.com, and Brian Nelson, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.

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