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In November’s COVID-19 Update webinar, Zonda chief economist Ali Wolf put forth three conditions outside the housing market that would make builders “feel good” about the future once met: a trusted vaccine, the election resolved, and another fiscal stimulus package. As of now, while the second fiscal stimulus has passed and the election resolved with very little impact on the stock market, Wolf gives the the vaccine conditions a “half-check.” While two vaccines are available and effective, distribution is slower than initially expected.

The headline unemployment rate is currently 6.7%, or 9% given add-on conditions. The recent “backpedaling” of the economy, with nonfarm payroll numbers falling back by 140,000 in the December report, matches Wolf’s fears of a “double-dip” recession. “[Overall,] we had 10 million people working last February that are not working today,” Wolf says. “So that 10 million has become very sticky … and of those 10 million, 37% are long-term unemployed.” While high long-term unemployment is bound to cause some “economic scarring,” ongoing expanded unemployment benefits are expected to soften the blow.

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