Welcome to NerdWallet’s Smart Money podcast, where we answer your real-world money questions.
This week’s episode features a roundtable discussion of Nerds reflecting on the financial impact of the COVID-19 pandemic.
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Our take
The COVID-19 pandemic seemed to touch every corner of our lives and especially our finances. Some of today’s pressing economic issues, including inflation and the competitive housing market, have their roots in the pandemic, proving that COVID-19 isn’t finished with us yet.
In early 2020, Americans were able to save more money than ever thanks to government stimulus checks. However, spending levels today are lower than they were before the pandemic, partly because of the increased price of goods and services.
Massive unemployment was another product of the COVID-19 pandemic. According to the Bureau of Labor Statistics, the unemployment rate hit 14.7% in April 2020 before coming down to 4.8% in September 2021. Now, the country has largely opened back up, and unemployment is lower than it has been in over 50 years.
The stock market plummeted in March 2020, taking many Americans’ retirement funds with it, but it recovered to hit a high in December 2021. As of the first quarter of 2023, though, the stock market remains below 2021 levels in response to the Federal Reserve’s efforts to fight inflation.
Those looking for a house today may come up empty-handed as the housing market remains impacted by the 3-year-old pandemic. When mortgage rates were below 3% from September 2020 to September 2021, a record low, many homeowners refinanced. But after the Fed raised interest rates eight times since the beginning of 2022, mortgage rates steadily increased, discouraging homeowners who locked in low interest rates a few years ago from putting their homes on the market. With fewer homes for sale, existing home prices remain high.
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The article Smart Money: How COVID-19 Changed Our Finances — and Our Advice originally appeared on NerdWallet.
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