By Chief Economist Robert Dietz | NAHBNow
The economy rebounded sharply during the third quarter, as GDP registered a 33.1% seasonally adjusted annual growth rate. This bounce back followed a gradual reopening of the economy in the wake of the coronavirus pandemic.
Prior shutdowns of economic activity had predictably large macro effects, resulting in annualized GDP declines of 5% and 31.4% in the first and second quarters, respectively. This led to an unemployment rate of almost 15% in April. The gains during the third quarter helped reduce the unemployment rate to 6.9% in October, but broad-based economic distress continues. As virus-related hospitalizations increase this fall, policymakers should choose focused protection over shutdowns given the potential economic costs.
Home building has undoubtedly been a bright spot for the economy during this period of economic distress. Demand for single-family housing has increased on historically low interest rates, a need for more residential space, favorable demographics for home buying, and an evolving geography of housing demand that favors low density, more affordable markets.
