The stock market continues to be volatile and the job market is still in worse shape than where it was before Covid-19 plunged the United States into recession. But there is still one undeniable bright spot for America's economy: the housing market. Mortgage applications are rising, thanks to record low rates. The Federal Reserve is planning to keep interest rates near zero for the foreseeable future, which will make financing even more affordable. "Housing is probably going to come out as one of the winners of this crisis," said Esty Dwek, head of global market strategy for Natixis Investment Managers. "Interest rates should remain low for even longer. So, I don't expect housing to be another shoe to drop for the economy," Dwek added.
Strength in the housing market has helped power the CNN Business Back-to-Normal Index as well. On the housing front, the index includes daily new home postings from Zillow and weekly loan applications from the Mortgage Bankers Association. Low rates are one of the main reasons why home sales and prices continue to rise. What's more, the coronavirus outbreak is prompting many people in big cities to pull the plug on apartment living and buy bigger homes in less densely populated suburbs. "Rising prices are just one more reason for people to leave expensive urban neighborhoods behind," said Redfin chief economist Daryl Fairweather in a report last week. "The sudden rise of remote work has allowed homebuyers who are priced out of one neighborhood to expand their search to more affordable areas," Fairweather added.