Covid-19 is still having a lasting impact, gripping the US economy some 5 months after it reared its ugly head. This time it is targeting the US housing market. With 44 million Americans still unemployed, many unable to pay rent and utilities, and temporary eviction bans set to lift, the US faces an eviction catastrophe the likes of which we have never seen.
On July 25th the temporary ban for evictions is set to expire. Many individual states (Michigan, Louisiana, and Pennsylvania, for example) put their own policies in place and some have already or are set to expire in July with no extensions. In addition, the stimulus package granting an extra $600 in federal unemployment compensation will also expire soon with no extension or new deal set to provide additional relief. “Now, Axios, citing the weekly US Census survey which measures the impact the pandemic has had on Americans, reported that one-fifth of adults said in May that they were unsure whether they’d be able to pay their rent or mortgage in June.”
“Mass evictions could also create a mental health crisis, causing an emotional and mental strain on those who lost their shelter, and who could end up food insecure. Evicting people also generally ruins credit, which may make it harder to find new housing, especially during a pandemic,” says Aaron Carr, executive director of the Housing Rights Initiative.
The Federal government has made several attempts to aide Americans suffering economic hardship. Many companies have deferred or outright cancelled rent/mortgage payments, but the with the slow economic recovery it may not be enough. The House passed the HEROS act to stall the eviction mandates another 12 months but has halted at the Senate.
Covid-19 knows no bounds and has had very detrimental effects on markets across the globe and the US housing market is no exception. With cases rising after the phased re-opening of states across the country, the housing market may be something to keep an eye on moving forward barring mass government aide in the form of temporary eviction bans.