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MReport April 2020

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M R EP O RT | 21 The Impacts of the Coronavirus Danielle Hale, Chief Economist at Realtor.com, discusses the impact the disease is having on the U.S. economy and its possible effects on the housing market. D anielle Hale is respon- sible for developing and translating real estate data into consumer and industry insights. She also leads Realtor.com's team of the indus- try's top analysts and economists with the goal of providing deeper and broader housing insights to people throughout the home jour- ney, industry professionals, and thought leaders. Before joining Realtor.com in July 2017, Hale spent nearly a decade as an economist and policy researcher at the National Association of Realtors NAR). As Managing Director of Housing Research, Hale oversaw the pro- duction of closely followed hous- ing market data, including NAR's monthly pending and existing home sales indices and quarterly home price reports. Hale spoke with MReport on the economic impact from COVID-19, the Fed's response, and what homeowners need to do to protect their investments during this volatile time. M // What could the long-term economic and housing impacts of coronavirus look like? HALE // Long term impacts will depend a lot on how the disease evolves. Based on what we know now, it seems highly contagious and while mild in 80% of cases, the 20% of cases that are not mild are concerning. In the long-term, it seems very likely that scien- tists will develop treatments and possibly even a vaccine that will mitigate the concerns, but in the medium-term, we could see a slowdown in economic activity as sick and quarantined workers stay home which disrupts manufactur- ing and global supply chains. In fact, anticipation of possible virus- induced weakness was one of the factors that motivated the Fed to drop the federal funds rate by 50 basis points and analysts expect additional cuts at the March scheduled meeting. M // How could the economic concerns brought on by the disease benefit the housing market? HALE // So far, the economic concerns brought on by COVID- 19 have led to lower interest rates, including mortgage rates. This has created a mini-refinancing boom. Additionally, lower mortgage rates mean savings for buyers over what they might otherwise have paid. For an 80% loan on the typical home financed over 30-years, a buyer is looking at roughly $160 less as a result of mortgage rates now compared to where they were one year ago. M // Do you foresee the Fed coming in and dropping interest rates again if the stock market continues to falter? Why? HALE // The Fed has made it clear that it will monitor the situation and will move to use its available tools if slowing econom- ic growth warrants their use. In other words, it won't depend on the stock market, but if the Fed perceives that economic growth could take a hit as a result of the spread of the virus or as a result of government actions to mitigate the spread of the virus, such as encouraging or requiring indi- viduals to stay home. M // What should homeowners do to protect their investments during these unsure economic times? HALE // A home is generally one of the larger sources of net worth for most homeowners, which undoubtedly helps owners rest a bit easier when other invest- ments are fluctuating wildly. Making sure you have enough of a cash or near-cash emergency fund is a good practice and will help ensure you can make your mortgage and other payments even in the event of a disruption to income. M // What are some of the challenges with staying up- to-date with today's housing market? HALE // Economics training is certainly helpful, but I find that the geography I studied is almost equally helpful in keeping up with the housing market. The housing market is really the sum of thousands of local housing markets, and while certain phe- nomena such as factors influencing interest rates are truly national, many factors really come down to market dynamics at the local level. And to really understand national trends, it helps to be able to build a picture from the local level up. That's one of the great things about working at realtor. com where we have property level data on the vast majority of homes in the US, so we can understand what's going on locally—often at the zip code level—and then zoom back out to see what that means for the "national" housing picture. M // What about your role do you enjoy the most? Why? HALE // I love helping people understand what's going on in the economy and housing market and most specifically what it means for them, no matter where they are in the homeownership journey. I love that my insights are also picked up and shared by the many profes- sionals (lenders, real estate agents, etc.) who help make homeowner- ship possible. I think homeowner- ship is valuable to society for a variety of reasons, so if I can help an aspiring owner understand what's going on so that they can make their dreams a reality, that's something I really enjoy. COVER STORY SPECIAL REPORT: COVID-19 INDUSTRY VOICES: INSIGHTS FROM MREPORT'S EDITORIAL ADVISORY BOARD "The Fed has made it clear that it will monitor the situation and will move to use its available tools if slowing economic growth warrants their use." —Danielle Hale

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