A promising sign of a pandemic-ravaged economy has stalled: fewer borrowers are resuming mortgage payments.
The proportion of homeowners who deferred mortgage payments had been steadily declining from June to November, indicating that people were returning to work and the economy was beginning to recover. But the decline has been largely flattened since November, when the current wave of coronavirus cases increased in communities across the country.
For the past two months or so, this group of homeowners has stood at about 5.5%, according to the Association of Mortgage Banks. While this has fallen from a high of 8.55% in June, some economists are concerned about the stagnant tolerance rate, and worry that it may even start to rise as the economy launches jobs. work.
Other data indicates a slowdown in the U.S. economy this winter and increased pressure on household finances. Employers cut jobs last month for the first time since spring. The number of job offers has declined and unemployment insurance demands remain high. Retail sales have fallen for three consecutive months.
“With the declining recovery and more applications for unemployment claims, we are likely to see increased tolerance demand,” said Ralph McLaughlin, chief economist at Haus, a start-up home finance company. “One of the guarantees that people have, if they own a home, is to ask for tolerance.”