U.S. Existing-Home Sales Rose 20.7% in June

by John Anderson 15 days ago in economy

During the month of June, the houses sold like hot cakes

U.S. Existing-Home Sales Rose 20.7% in June
“ Buyers are now trying to take advantage of historically low cost mortgages. "| Breno Assis via Unsplash .

As life is slowly resuming its course after months of confinement, the United States is still entangled in the Covid-19 epidemic. The number of detected cases has exceeded four million and several states continue to set daily records.

Due to the spread of the coronavirus in its territory, the country has entered a recession and unemployment has exploded. But despite a very poor economy, one sector experienced a sudden jump in June: real estate. Home sales (excluding construction) increased by 20.7% from the previous month.

According to the National Association of Realtors (NAR), that number represents the largest monthly increase since at least 1968, when it began counting.

According to the association, this rebound is due to " apartment tenants looking for more space, young families settling in the suburbs and the purchase of second homes by wealthy urbanites ".

“ As we come out of confinement, we see that the buyers have multiplied. They are now trying to take advantage of mortgages that are at historically low prices ", said Lawrence Yun, the NAR economist director.

Real rebound

The big question now is whether or not this increase will continue in the coming months. While summer is often a busy time for moving in, this sudden spike could just be the result of a traffic jam during containment. Anyone who can afford to buy would have concluded their sales as soon as possible.

Indeed, as the Wall Street Journal notes, many potential buyers put off investments because of precarious job security and the health risks associated with visiting homes.

But despite this jump, the levels are still far from those before the pandemic. Sales for the month of June were down 11.3% compared to the same period a year earlier.

The economic crisis linked to Covid-19 risks destabilizing emerging countries

As many as thirty-seven states could be destabilized in the second half of 2020, consulting firm Verisk Maplecroft warns in a new report. Unemployment, loss of income, and hunger, spawned by the coronavirus pandemic, could swell the ranks of protesters, fueling protests and riots.

In early March, with the implementation of containment measures, instability was reduced in emerging markets, according to data from ACLED (Armed Conflict Location and Event Data Project).

But the protest movements have already almost returned to their pre-pandemic levels. They are expected to increase further in the next two to three months. The demands most often relate to socio-economic inequalities, civil and political rights, and the fight against corruption.

No one is spared

Nigeria, Iran, Bangladesh, Algeria, and Ethiopia are the countries most at risk, according to Verisk Maplecroft. But the danger is only slightly lower for emerging economies like India, Brazil, Russia, South Africa, Indonesia, and Turkey.

In sub-Saharan Africa, economic decline, poverty, and lack of food increase the risk of protests; particularly in Nigeria, the Democratic Republic of the Congo, and Ethiopia.

In Ethiopia, the situation has already ignited: following the death of an Oromo musician and activist, Hachalu Hundessa, 166 people have already died in mass protests. In the DRC, the rise in the price of food and the conflict around the electoral commission is causing instability. Nigeria could suffer a similar fate.

In Latin America, Venezuela and Peru are most at risk. But Chile, Brazil, and Argentina are also in a very precarious situation.

In countries with a strong “rebound” capacity, pre-existing problems will continue to generate instability: mobilization against the citizenship law in India, pro-democracy demonstrations in Hong Kong, and the Black Lives Matter movement in the United States.

economy
John Anderson
John Anderson
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John Anderson

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