From the cities to the suburbs, the pandemic has sent a shockwave through the US real estate market.
According to finance professor Tomasz Piskorski, the future of both the residential and commercial market is dependent on government policy decisions in the coming months.
“When you try to predict what will happen to the real estate economy, you make your stand on the nature of the policy response,” he said.
Piskorski, the Edward G. Gordon Professor of Real Estate, compared the current crisis to the Great Recession, noting that many of the reforms put in place after the subprime crisis, as well as government relief efforts such as the CARES Act, have helped sustain some sectors of the market.
While those government interventions have been vital, the outlook for both residential and commercial real estate is also dependent on several unknown factors, such as the impact of unemployment and the role of mortgage forbearances.
Piskorski, however, offered one silver lining: 30-year fixed rate mortgage rates are at 2.88 percent, a historic low.
“It helps make housing affordable and it has stimulated a huge refinancing boom,” he said.
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