So far, the coronavirus crisis has been different from other recessions which marked the end of trends like the housing
Both of these sectors have recovered their declines and in some instances are much higher. Another powerful trend before the coronavirus that seems to be unaffected is the stealth bull market in housing. It would make sense that housing would be negatively affected by the shutdowns and stay-in-place orders as it would lead to fewer people wanting to sell their homes or buy new ones. Additionally, the economic weakness would hurt consumer confidence which would result in people being less likely to make a major purchase.
Housing Resilience
While housing has weakened, it's not as significant to alter its trend. And as shutdown orders have been lifted or eased, it's one of the first parts of the economy to bounce back. According to real estate data from Redfin
One factor has been millennials are moving from cities to suburbs. This was a growing trend over the past few years, and the coronavirus has accelerated it as well. Another factor is that so far the economic damage of the coronavirus has been borne by low wage workers. Friday's jobs report showed that only 9% of people making more than $50 per hour have lost their jobs or had hours reduced. Therefore just like the booming stock market
However, the biggest factor in the housing market's strength is that supply and demand dynamics are favorable especially compared to demographics. The past decade has seen record-low levels of household formation which has negatively affected demand. It's also seen low levels of new housing supply due to an overhang from the housing bubble. If household formation ticks higher, there will be shortages and a boom in new house construction. On top of these fundamental factors, mortgage rates are also at record lows which increases affordability.
Two stocks that could thrive if housing continues to improve are online real-estate companies like Redfin and Zillow
