New report: 30% of Americans missed their housing loan payments

New report: 30% of Americans missed their housing loan payments
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A new survey revealed that 30% of Americans missed their housing loan payments as the country grapples with unemployment and economic damages brought by the coronavirus crisis.

Findings suggest that is an increase from 24% who missed their payment just two months earlier in April and about on par with the 31% who missed payments in May.

The survey by Apartment List, an online rental platform, discovered that the groups most likely to miss their loan payments are renters, younger, and lower-income households.

While a “historically high” rate of Americans have missed paying their housing payments, eviction protections to curb the spread of the coronavirus are starting to expire.

Moreover, the 30 million unemployed individuals may lose the extra $600 per week in unemployment benefits at the end of July.

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With this, experts predict a housing “apocalypse” unless the government creates an intervention. Some 37% of renters and 26% of homeowners are concerned that they will experience eviction or foreclosure in the next six months, according to Apartment List.

Homelessness

Columbia University researchers believe that homelessness could rise by between 40% and 45% this year over where it was in January 2019.

Some legal experts foresee “at least” 50,000 eviction filings in New York City alone when it removes the moratorium by June 20, most for nonpayment of rent.

“In the current climate, with unemployment at record levels and with many unable to pay rent for Covid-related reasons, neither housing court judges nor our lawyers will be able to resolve many of these disputes, resulting in evictions, displacement, homelessness, senseless exposure to infection and more difficulty in containing Covid-19,” writes The Right to Counsel NYC Coalition in a letter to Lawrence K. Marks, Chief Administrative Judge at the New York State Unified Court System.

Advocates believe that governors should extend or keep universal eviction moratoriums for the duration of the coronavirus crisis to prevent a rise in homelessness.

Such decision would keep people to stay at home and prevent Covid-19 from spreading even more in the US. The coronavirus outbreak has already led to 118,000 deaths.

Meanwhile, the House’s Emergency Rental Assistance and Rental Market Stabilization Act would provide $100 billion for emergency rental assistance, which would assist tenants around the country to pay their rent and bills. The HEROES Act offers an extension of the nationwide moratorium on eviction filings, executions, and hearings for a year.

Solomon Greene, a senior fellow in housing policy at the Urban Institute, told CNBC Make It that those responses are important.

“Housing instability has huge health consequences even when we’re not facing a pandemic,” says Greene. “Exposure risk is so much more amplified and worsened when you can’t shelter in place because you don’t have a place to shelter.”

Real estate

Real estate updates during the coronavirus crisis appear promising with the 13% increase in sales of newly built homes, according to the US Census.

The sales of newly built homes slowed dramatically in March as the coronavirus halted the economy. However, they recorded the strongest May pace since 2007. Builders themselves were also surprised about the level of recovery. However, housing starts were not nearly as strong, and builders trying to manage the demand.

Data showed that the increase in sales is from homes not yet started. This led to the 15% decline of the supply of homes for sale that were being constructed.

“Sales of homes not yet under construction are rising given capacity limitations in the building industry,” said Robert Dietz, chief economist at the National Association of Home Builders.

“Due to labor and land constraints, homebuilders were already producing too few single-family homes given potential demand. As housing demand has picked up in recent weeks, builders have shifted sales to homes not yet under construction – a 20% year-over-year gain for such sales,” he added.

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