The Covid-19 pandemic has killed over 280,000 Americans to-date. It is projected to kill a total of half a million Americans by March 1,2021. Many of those who survived face a host of other problems. Among them are those facing eviction.
Millions of Americans expect to face eviction from their homes or apartments – whether owned or rented – in 2021. 17.8 million adults in households that are behind on rent or mortgage payments. Of them, 5.8 million (about a third of the total number) adults say they are ‘somewhat to very likely’ to face eviction or foreclosure in the next two months, according to a survey completed Nov. 9 by the U.S. Census Bureau (Source: U.S. Census Bureau, Household Pulse Survey). Roughly half of households not current on their rent or mortgage payments in Arkansas, Florida and Nevada think there’s a “strong chance” of eviction by early January. This equates to more than 750,000 homeowners worried about eviction in the coldest month of the year with a bleak job market and Covid-19 raging around the country.
Evictions could lead to a spike in people moving in with families and friends. People moving from apartments (shared with numerous tenants in large buildings) to single family homes, nearby or faraway, could also lead to a spike in Covid infections.
Evictions could also see a spike in foreclosures on homes. By the time spring comes around, many homes could be available at deep discounts, perhaps from banks holding foreclosure sales. But then again, who will have the cash (and need) to buy homes – the people with savings, good credit and secure(where do those exist?) jobs – to take advantage of (very)low mortgage interest rates. This is a time you’ll wish you had savings. But, few people will buy second homes unless they are sitting on a lot of cash. Why? Because, finding financially sound renters will be a huge challenge with 17.8 million people out of their homes.
Tough Winter Ahead
The CARES Act, signed into law last March, allows homeowners to pause mortgage payments for up to a year if they experience hardship as a result of the pandemic. Borrowers who signed up at the start of the program could face foreclosure by March. Some homeowners have the option to defer (still owe but offer to pay later) mortgage payments by six months. That just kicks the can down the road to later in 2021.
Where are the Big Problems
If you look at cities, New York City could see the worst of the evictions – somewhere between 250k-450k according to the US Census Bureau’s Houshold Pulse Survey, conducted Nov 9, 2020. Over 10 metros in the US could likely have more than 50K in evictions.
If you look across the country, the states that are hurting are many – see the REDS in the map below. The ‘hurt’ from this pandemic is severe and widespread (unless you live in Maine).
The Centers for Disease Control and Prevention’s nationwide temporary suspension on evictions — aimed at stemming the spread of coronavirus — is slated to end Dec. 31. The unemployment benefits enacted into law earlier this year expires at year-end as well, and the US Senate has no interest to extending these two programs. If the Biden administration extends these programs, the earliest we could see relief is in late January. If the Republicans hold on to the Senate, relief is a BIG IF.
As you spend time with your family, we hope you come to see that COVID is not just a roadblock or an obstacle. Instead, it can be the jumping-off point for a whole new way of being.
Let’s continue the conversation here.
1. What are your thoughts about the effect of the pandemic on the home you live in – rented or owned?
2. How do you think the government, landlords and banks work with homeowners and renters during this pandemic?
3. How do you think mortgages and rents should be structured in the ‘new normal’?
4. If you like this article, PLEASE SHARE THIS WITH YOUR FRIENDS AND FAMILY. And, come back often to read more about many other aspects of living in the ‘new normal’.