Consumer Housing Confidence High – Finances Not So Much

WASHINGTON – Freddie Mac research finds uncertainty among renters and homeowners about their ability to pay their rent or mortgage during the pandemic.

However, attitudes are improving. The survey – two-thirds of respondents are homeowners and one-third are renters – finds that although homeowners and renters continue to feel the economic pressure of the pandemic, those figures have improved and are down from an all-time high reached in October and November 2020.

“While the housing market appears to be healthy and has recovered faster than the rest of the economy, many segments of the population are still struggling,” says Donna Corley, executive vice president and head of single-family business at Freddie Mac.

“The pandemic has been economically devastating for millions of Americans, and those who rent have been hit the hardest,” adds Debby Jenkins, executive vice president and head of multifamily business at Freddie Mac. “In the early days of the pandemic, we acted quickly to help remove the threat of eviction for residents of the more than 4.2 million multifamily units we helped finance, and that protection is ongoing for nearly 100,000 families as a result of our multifamily forbearance program.”

Concern about housing payment

Throughout 2020, more than half of renters were worried about their ability to make housing payments, fluctuating between 54% (April) and 71% (November). In December, renter concern showed a slight improvement at 67% and dropped to 63% in February 2021.

Meanwhile, homeowner concern about making payments in 2020 fluctuated between 33% (June) and 55% (October), ending the year at 45%. Those numbers further improved to 41% in February 2021.

As of December 2020, 27% of homeowners and 35% of renters had asked for a housing payment postponement, most commonly due to uncertainty over making payments beyond the next one. By February of this year, those numbers dropped to 19% of homeowners and 28% of renters.

Confidence in the housing market high

Confidence in the overall housing market fluctuated between 48% (April) and 69% (October) but remained high overall, averaging 60% for all of 2020. As of February 2021, confidence improved to 66%.

During 2020, renters were more likely than existing homeowners to buy homes, with many shifting into homeownership through the late summer and early fall. The likelihood of homeowners to sell their homes (18%) and renters looking to purchase a home (34%) has held steady since the beginning of 2021.

Likewise, refinance activity remains strong, with nearly a third of homeowners indicating they were likely to refinance their home within the first six months of this year.

A challenging economy presents personal finance issues

While many homeowners and renters are struggling, 72% of employed respondents were confident they will maintain the same level of income through the first half of this year. As of February 2021, 43% of respondents were living payday-to-payday and had just enough to get by, 17% didn’t have enough for the basics until the next payday, and 40% had enough money to last beyond payday.

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