Dire predictions of the state of the U.S. housing market may have not come to pass but experts believe that another crisis may be looming. According to a recent report, mortgage delinquencies have now hit pre-pandemic levels, signaling what could be another housing crisis.
The annual State of the Nation's Housing Report released by Harvard's Joint Center for Housing Studies indicated that while the country may have averted one crisis, another may be coming sooner than expected. The report said a new homeless crisis may be looming as people who bore the brunt of the pandemic may soon be incapable of paying their mortgages and rent.
The report said that while a small group of people may have bought homes with the savings they built during the pandemic, most others are now being saddled with debt.
"Millions of households were financially unscathed coming out of the pandemic. But the pandemic has left millions of others struggling to make their housing payments, especially lower-income households and people of color," senior research analyst at the Joint Center for Housing Studies, Alexander Hermann, said.
Lower-income tenants and those with mortgages heavily relied on government support to pay their bills during most of the pandemic. With the government now expected to lift those measures, millions of Americans may be in danger of losing their homes.
According to the report, about a third of renters had used their unemployment or stimulus payments to pay rent. Some still had to borrow or draw from their savings to keep up with payments.
As the U.S. economy slowly recovers, with businesses now moving toward normal operations, the government is slowly taking away emergency support. This includes the lifting of existing eviction moratoriums, which had long kept tenants in their homes.
The report said eviction moratoriums and stimulus packages were always meant to be just a stop-gap. They were never meant to address the worsening housing crisis in the country. Advocacy groups have called on the government to do more to avert the looming crisis.
"If the Biden administration allows the federal eviction moratorium to expire before states and localities can distribute aid to households in need, millions of households would be at immediate risk of housing instability and, in the worst case, homelessness," the National Low Income Housing Coalition said in a statement.