The Pandemic's Effect on the Housing Market and Mortgage Delinquency

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 fourfold increase in serious delinquency and distressed sales within two years, with more than 2 million home mortgages in serious delinquency by year-end 2021.