Why the Stock Market Drop Could Help—and Hurt—Homebuyers
With the delta variant of COVID-19 spurring a rise in U.S. cases, fears about how that could affect the recovering economy led to a big stock market drop on Monday. And as nothing in the financial markets happens in isolation, if stocks don’t recover swiftly, this could affect the white-hot housing market.
The Dow Jones Industrial Average fell about 600 points, or about 1.8%, on Monday morning in what experts are calling a “significant” drop. If it bounces back up, it’s likely to just be a blip, as the market has been strong for a long time. However, if the stock market continues to decline due to uncertainty over the pandemic, it could help—and hurt—homebuyers.
The drop “is a pretty big deal,” says Tomas Jandik, a finance professor at the University of Arkansas in Fayetteville. Investors are worried about potential new lockdowns and economic restrictions as well as rising inflation.