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Abstract
Weekly data show how housing activity contracted as the pandemic expanded. Both the home purchase and home rental markets experienced a 40% to 50% decline by mid-April relative to year-ago activity, but subsequently rebounded. Record low mortgage rates spurred home buying, driven by first-time home buyers, and a refinance boom. Home prices rose through summer 2020 as the for-sale inventory remained in short supply, but price growth is forecast to slow and fall in several states by 2021. Projections show that elevated unemployment coupled with declining home prices would cause serious delinquency and distressed sales to rise. Compared with the pre-pandemic period, the Baseline projection shows a four-fold increase in serious delinquency and distressed sales within two years, with more than 2 million home mortgages in serious delinquency by year-end 2021.
TOPICS: Real estate, MBS and residential mortgage loans, financial crises and financial market history
Key Findings
• Both the home purchase and home rental markets experienced a 40% to 50% decline by mid-April relative to year-ago activity, but subsequently rebounded.
• Projections show that elevated unemployment coupled with declining home prices would cause serious delinquency and distressed sales to rise.
• Compared with the pre-pandemic period, the Baseline projection shows a four-fold increase in serious delinquency and mortgage loss events within two years, with more than 2 million home mortgages in serious delinquency by year-end 2021.
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US and Overseas: +1 646-931-9045
UK: 0207 139 1600