- Google Trends data suggests some worrying developments for the U.S. housing market.
- The impact of the coronavirus on employment could be particularly negative for the rental market if tenants can’t make rent.
- The Federal Reserve’s interest rate cut can’t halt a crash in house prices if mortgage rates don’t fall.
The stock market had its worst crash since 2015 on Monday as many are worried the US economy faces a treacherous road as it deals with the outbreak of the coronavirus.
For those investors looking to predict the future, google trends data may be indicative of significant trouble for the consumer, threatening a record high US housing market in particular.
Housing Market Cannot Ignore Rising Unemployment
As hourly employees face an unprecedented crisis, the economic catastrophe that the coronavirus shutdown is brewing is all too real for the most at-risk workers in society . There is plenty of speculation that huge numbers of workers who live paycheck to paycheck will struggle to make ends meet as they are either fired or have their employment suspended without pay.
) While there may be few homeowners among this group, they are integral to the housing market. In , more than $ 823 billion in rent was paid in the US , and many homeowners could not pay their mortgages without the reliable glut of tenants and limited supply of homes. Unfortunately, Google data suggests things are unraveling.
Google Trends Data Reveals Economic Turmoil
Two extremely concerning internet searches have skyrocketed over the last two weeks. The first and arguably most worrying is the search for “unemployment benefits”.
As you can see from the chart below, it appears that layoffs may be piling up as more and more people explore if they are eligible for government assistance.
The US housing market has been supported for many years by the confidence that there was a well-funded army of renters, particularly in urban markets, as unemployment has trended close to record lows. This pillar of the United States economy may be eroding.
In isolation, this could, of course, be an anomaly. Unfortunately for homeowners, a more direct search has doubled during this coronavirus fueled market slowdown. “Can’t pay rent”.
This may be a clear. Sign that the housing market is in for a direct hit. Given how expensive house prices are, there is little room for owners to offer tenants leeway as they
. As a result, the rental market chain can quickly break down.
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