US Housing Market : 4.3 Million Unpaid Mortgages
(Tue, 23 Jun 2020). The pandemic-fueled recession is putting a damper on the U.S. housing market. The latest data prove it. Millions of Americans have been unable to make mortgage payments, putting additional selling pressure on the housing market.
Over 4 million individuals have not been able to pay their mortgage payments for 30 days or more. The housing market may see additional selling pressure as pressure on homeowners mount. Renters have also been unable to afford payments, putting additional risks on leasers. A staggering 4.3 million people have been unable to make their mortgage payments, according to research firm Black Knight. This puts additional selling pressure on the U.S. housing market, on top of a potential drop in foreign buyers.
Data show that over 8% of all U.S. mortgage payments are overdue or now in foreclosure. The number of mortgage holders that are 30 days late increased by 723,000 in the past month.
This Is What The Fed Is Scared About
On June 10, the Federal Reserve predicted that 15 million Americans would remain jobless until year’s end. Just ten days after the initial prediction, Boston Fed President Eric Rosengren emphasized that higher unemployment will be hard to avoid. A surge in jobless claims is the main reason behind the rise of late mortgage payments and foreclosures.
Many individuals rely on a stable income source to pay off their mortgages. Due to the pandemic, millions are now struggling to make their mortgage payments. A rise in foreclosures may put additional selling pressure on the housing market.
Renters are affected too; their inability to pay rent could also spill over into the housing market by forcing leasers to unload their property. As the pandemic shows signs of resurgence, the pressure on both renters and leasers will likely increase.
Housing Market At Risk As Homeowners Worry About Losing Property
Data show that foreclosure protections are beginning to expire at a time when the housing market is starting to slump. This means more houses could enter the market very soon, which would boost sell-side volume in the U.S. housing market. The sentiment around the housing market remains cautiously pessimistic. Survey results show homeowners worry about the future of their mortgages in a highly uncertain economy. Their outlook is unlikely to change anytime soon.
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