The media is shocked and scratching their heads. The projection for unemployment in May was a loss of 9 million jobs. However, in May there was a 2.5 million job GAIN. The stock market is 5% on the S&P 500, at a record high. And, what is truly amazing is these reports were done when only 50% of small businesses were open in America. As of June 5, 80% of small businesses were open. Employment rates are expected to be even better in June.
During the lockdown, total personal income actually grew because of massive stimulus packages. In addition to the stimulus packages, there was decreased spending which caused increased saving. Before the pandemic people usually saved 8% of their income. During the last month, people saved 33% of their income.
Personally, we cut back on spending during the lockdown. Mostly, because we couldn’t spend. We couldn’t go to local restaurants, gyms, clothing stores, etc. So we saved! We had plenty of time to re-evaluate what we want and value in our lives. Some of our values shifted and others deepened. We found out we love to garden and grow our own food. Now that things are opening up, we are back in the market. We are eager to re-landscape and create an edible garden. We’ve been to several nurseries in the area, putting back into the economy. As we have been out and about, we have also seen many restaurants open. Stores are open and people are eager to get back in the market. It is so good to see people out in the community and feel a renewed energy.
Points to Ponder:
The U.S. economy was very strong before the lockdown. Now, we have added massive stimulus in the economy with guaranteed low interest rates, for a while. The average Freddie Mac interest rate is 3.1%.
There was almost a 20% increase in mortgage applications last month.
A drop of 1 million construction jobs occurred in April 2020. 64,000 of the jobs that came back in May were in construction.
What does this tell us and what did the lockdown cause?
Instead of running out for paper towels and toilet paper, people are running out to buy homes. There is a huge pent-up demand, savings, low interest rates, and massive desire to move. This all points to a strong real estate market. According to experts, the economy will begin to recover in the second half of this year. With real estate leading the way, recovery may start sooner than we think.
Americans are coming back to business!
Whether you are ready to buy or sell, we are ready to make your next move become a reality. Call Steve Day at 310-529-6456 to discuss the steps to get ready for your next move.