The housing market may also face headwinds beyond the early lift in activity we have started to see. For example, immigration was playing a key role in boosting housing demand before the pandemic. This source of demand could take some time to be restored as authorities clear backlogs and travel restrictions are gradually eased across the world.
Fiscal measures should continue to buffer income losses and support household spending during the second phase of the recovery, particularly because they are flexible and can adjust as needed. According to our survey of consumer expectations, respondents said they spent or expect to spend about 70 percent of these benefits, on average.