Last year brought with it one of the most surprising years housing has ever seen, but for mortgage servicers, their work has only just begun.
As 2019 came to a close, economists vigorously debated the chances of a recession in 2020. While divided, many suggested that a recession would be a possibility near the end of last year or even in early 2021. Others said we wouldn’t see any sort of recession until at least 2022.
Then COVID-19 made its appearance.
And while it did bring about a recession in 2020 as job losses mounted and stay-at-home orders slowed down the economy and even forced many businesses to close their doors for good, its effect on housing was unprecedented.
Because of the low interest rates brought on by the pandemic and the divided economic impact that the pandemic had on certain demographics (which hit renters the hardest), the housing industry boomed, seeing record-high home sales and mortgage originations, a strong demand for homes and rising home prices.
At the end of 2020, some of housing’s top economists, including economists from the Mortgage Bankers Association, Haus, CoreLogic, Redfin, Zillow and more, penned their forecasts for the year ahead, predicting that this year will continue to see a surge in home sales and originations as well as rising home prices. Interest rates will remain low, but could see some lift from last year’s all-time lows.
But for mortgage servicers, this year could get significantly more complicated, even when compared to the unprecedented changes in 2020. However, they are hard at work trying to ensure that they are prepared to handle this year’s twists and turns.