The Boston Fed came out with its latest housing report, the following is the conclusion summary from the report:
The Boston Fed report estimates that without any intervention, 11 percent of all homeowners and 33 percent of all renters in New England would be at risk of falling behind on their monthly housing payments. Without any policy intervention, the total value of these missed payments could reach upwards of $1.43 billion per month in the region, which would have a profound impact on the broader housing market due to the effect on property owners and lenders.
Intervention in the form of the federal CARES Act has provided households with direct payments and expanded UI benefits for the unemployed. The effect of these measures is substantial. This report estimates that 694,400 to 836,200 fewer households in New England—homeowners and renters combined—may be at risk of missing their rent or mortgage payments as a result of the CARES Act. However, 9 to 13 percent of renters and 2 to 3 percent of homeowners are likely still at risk of nonpayment. While this report has accounted for some of the delay in households receiving direct payments, it does not take into account the myriad issues and delays New England states are experiencing with issuing UI benefits. These delays likely prevented many households from receiving support during their first month of unemployment. The CARES Acts benefits include an additional $600 weekly unemployment payment that will end by mid-summer. If economic conditions have not improved by then, more intervention may be required.
The federal policy response has likely averted an immediate financial disaster for households. The state-level responses have helped guarantee that those who fall through the cracks can remain in their homes, at least in the short term. Every New England state has responded with a moratorium on evictions; Connecticut, in partnership with local credit unions, has instituted broad forbearance programs for homeowners. Additional interventions, such as those from Maine’s state housing agency, provide direct payments to households that are behind on rent. All these policies help keep families in their homes. However, these measures do not prevent households from continuing to miss housing payments entirely. Even under a best-case scenario, the total value of these missed payments could rise higher than $355 million per month. If these payments continue to accrue, they could reach more than $1.42 billion by the time federal benefits expire. Addressing these secondary impacts of the pandemic crisis could become more important as the immediate effects are resolved. The missed mortgage and rent payments that will likely accrue have the potential to create a burden on the broader housing market.