Is there cause for measured optimism in 2021 & beyond?
Will an economic hangover following the COVID-19 pandemic leave the U.S. economy and housing market be short-lived or have us reaching for a heavy dose of Tylenol? Economists and housing experts’ opinions fall between prognostications of doom and gloom and sunny optimism. However, outside these two extremes lies some interesting details reverse mortgage professionals may want to keep in mind.
A February 8th headline in Housing Wire asks “The last stand for forbearance housing market crash bros?” Just as some who contracted COVID-19 continue to have ongoing health problems in the wake of the infection, our economy remains vulnerable to a glut, 2.72 million to be precise, of mortgages currently in forbearance. The vexing question is how will those loans in arrears be unwound in such a way as to not damage a fragile economy? However, data reveals that the unraveling of these problematic loans may be less onerous. The volume of those seeking forbearance has dropped significantly according to a report from Black Knight.
Another scenario is the U.S. government will continue to move the goalposts for mortgage forbearances, a strategy that has been employed repeatedly in recent months.
Then there’s the underlying quality of homeowner’s credit of those who are in forbearance.
