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5 Signs The Pandemic Economy is Quietly Coming to an End 

Casandra Andrews  |  February 21, 2023

Covid may linger, but the financial shockwaves it sent through our economy are easing. Here are 5 signs the pandemic economy is ending. 

While we may never get back to our 2019 version of normal, things are finally starting to normalize when it comes to the financial upheaval sparked by the global health crisis nearly three years ago. Some signs of normalcy are easy to spot: friends’ Instagram pics of a sunny vacation abroad, the sight of shiny used cars lined up in dealership lots, and commuters clogging up the highways Monday to Friday. Others are harder to put our finger on, yet even more important: “We’re almost all the way back to normal in terms of normalization of the economy after the pandemic,” says Preston Caldwell, head of U.S. Economics at Morningstar Research Services. 

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Many of the pandemic’s negative financial impacts – and the shock waves it sent rippling through the U.S. economy – seem to be ending. Consider these signals that we’re finally moving into a post-pandemic era. 


When it comes to the U.S. housing market, “certain things are really back to normal,” says Skylar Olsen, chief economist for Zillow. During the pandemic “we had this really intense market – more than 60 percent (of properties) were selling above asking,” she notes, adding “Now only 25 percent of sales are going above asking. Homes sold in six days – and now you are looking at a month. Things were really competitive and now things are much slower.” 

Olsen suggests the U.S. is probably on the other side of a pandemic-era housing surge, explaining that mortgage rates have come back up from record-setting lows, making it less affordable to buy a home now than it was in early 2020. “Now, typically a mortgage payment, insurance, and property taxes will take more like a third from your budget,” she says. “I don’t know that affordability will ever get to pre-pandemic levels.”

A report from Morningstar on 2023’s economic outlook calls for a 5% decline in housing prices by the end of the year. Other forecasters predict the drop to be as much as 20% lower than current pricing levels. Does that mean it may be time to buy your first home? Experts say it’s important to review a variety of factors before taking the plunge. (In other words, high mortgage rates plus any outstanding debts you have need to be factored in before you get too excited by a good asking price.) 


If you’ve been patiently waiting for the prices of used cars and trucks to nudge back down, you’re in luck. After more than two years of chip shortages and soaring sticker prices, the numbers are beginning to work in a buyer’s favor again. “If you look at the index of used car prices, (they) started coming down in the last three months or so,” says Caldwell. “That’s been a major driver of the fall in the core inflation rate.” 

While the price of a new car rose by nearly 6% in the last 12 months or so, it’s a different story for used vehicles. Previously-owned cars and trucks continue to see price drops. In the last year, used vehicles have seen an 11.6% decrease, according to U.S. Bureau of Labor Statistics data for January 2023. 


Last March, investment firm Goldman Sachs closed a deal to acquire buy now, pay later (BNPL) digital lender GreenSky for $2.2 billion. Ten months later, the share price for Goldman dropped 6% following a January 2023 earnings report described as its “worst miss” since 2011. In other words, the BNPL investment may not have been the investment bank’s best decision. 

The BNPL sector has been under scrutiny for a while. In 2021, HerMoney reported on the intentionally murky waters of BNPL companies’ return policies, and that same year, the Consumer Financial Protection Bureau launched an inquiry into the business practices of five BNPL firms, after concerns were raised about the potential for people to misunderstand how the platforms operate — and the risks that may create for their credit scores. In September 2022, the CFPB released a report identifying several areas of risk for borrowers including inconsistent consumer protections, data harvesting and monetization, debt accumulation, and overextension.

Research performed in 2022 by the Financial Health Network (FHN) found that younger and financially vulnerable households are more likely to use Buy Now Pay Later (BNPL) services with almost one-quarter (24%) of BNPL users falling into that category. Unfortunately, that fact has also meant that many of those who used the short-term credit service are now behind on their payments, the FHN data showed. 


It’s not your imagination. By the summer of 2022, your social media feeds were likely filled with images of happy travelers flying off to the exotic spots they couldn’t visit during the dark days of lockdowns. Morningstar’s economic outlook for the fourth quarter of 2022 showed that even foreign travel by U.S. residents was “closing in on a full recovery, as inconceivable as that might have been (to some) in the depths of the pandemic.” 

How much U.S. residents are paying for pleasure trips supports that assertion. Travel spending totaled $97 billion in December 2022, which was 3% above 2019 levels and 7% above what was spent in 2021, according to the U.S. Travel Association. The International Trade Administration reported that international travel by Americans increased 41% in November 2022 compared to November 2021, which equates to 92% of total departures in November 2019, before the pandemic paused most overseas travel. 


Looks like we’ll have to wait a few more months before the U.S. national emergency regarding Covid 19 is officially over. Saying “an orderly transition is critical to the health and safety of the nation,” President Joe Biden, in a Feb. 10 statement, explained the national emergency declared in March 2020, must continue in effect beyond March 1, 2023. He expects to terminate the order on May 11. 

While thousands are hospitalized weekly in the U.S. with severe Covid symptoms, the numbers continue to trend downward. As of February, some 69.2% of the total U.S. population have completed a primary series of a Covid vaccine, according to the Centers for Disease Control and Prevention. About 15.8% of U.S. residents have received an updated booster dose, CDC data shows.


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