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Real Estate

Consumers more confident about making mortgage or rent

Freddie Mac's latest consumer survey found rising confidence for renters and homeowners

Although many homeowners and renters continue to feel the economic pressure of the pandemic, they’re growing more confident that they can pay their rent or mortgage, according to the latest consumer confidence survey by Freddie Mac.

The survey respondents, of which two-thirds are homeowners and one-third are renters, found that more than half of respondents in 2020 expressed concern about making payments, with a high of 71% reported in November. For the year, 45% expressed concern they wouldn’t make the rent or mortgage.

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, Freddie Mac said. By February of this year, those numbers dropped to 19% of homeowners and 28% of renters.

“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,” said 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,” added 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.”

Mortgage Tech Demo Day

HousingWire’s virtual demo days are designed specifically to help mortgage industry decision makers identify the technology solutions they need to operate efficiently and securely. Tune in April 6 to experience demos from the most innovative loan origination and valuation tech companies in the industry.

The fading concern over making mortgage payments comes amid a period of incredible confidence in the housing market. That confidence has fluctuated between 48% in April and 69% in October, and averaged 60% in 2020. As of February 2021, confidence has risen to 66%. Freddie Mac said its survey found that the likelihood of homeowners to sell their homes (18%) and renters looking to purchase a home (34%) has held steady since the calendar turned. Refinance activity also remains strong, with nearly a third of homeowners indicating they were likely to refinance their home within the first six months of the year.

The survey, however, does highlight the stark and growing inequality in America, which is clearly illustrated in the housing market. Prices for homes are at record highs, inventory is at historic lows, and many middle- and lower-middle income prospective buyers are being edged out of the marketplace by established owners and those with credit scores in the upper 700s. That’s despite mortgage rates near historic lows for much of the past year.

And while foreclosure and eviction moratoriums have staved off the immediate prospect of being booted, some landlords and servicers have filed paperwork to remove homeowners and tenants for lack of payments. Persons of color have been disproportionately impacted by the pandemic.

In Freddie Mac’s latest survey, 72% of currently employed respondents were confident they will maintain the same level of income through the first half of this year. As of last month, 43% of respondents were living paycheck-to-paycheck and had just enough to scrape by, while 17% didn’t have enough for the basics until the next payday. Forty percent cited that they had enough to go beyond payday. 

For its part, Freddie Mac in February announced the creation of new leadership roles to help address equity in housing in single- and multifamily housing businesses. The GSE appointed Pamela Perry as vice president of single family equitable housing and Amanda Nunnick as vice president of equity in multifamily housing.

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