Freddie Mac: ‘Many Segments of the Population Are Still Struggling’

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Freddie Mac has conducted new research that examines renters’ and homeowners’ concerns about their ability to pay their rent or mortgage during the pandemic, finding that although they continue to feel economic pressure, situations have improved since October and November 2020.

Freddie Mac’s survey, in which two-thirds of respondents were homeowners and one-third were renters, shows that 41% of homeowners expressed concerns about meeting their mortgage obligations. That figure is down significantly from 55% in October, but is still higher than in June (33%).

As of December 2020, 27% of homeowners had asked for a housing payment postponement, most commonly due to uncertainty over making payments beyond the next one.

In February, that number dropped to 19%.

“Freddie Mac is focused on understanding how consumers are thinking about their current and future financial situation amid a pandemic,” says Donna Corley, executive vice president and head of single-family business at Freddie Mac. “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.”

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

And while many homeowners and renters are struggling financially, 72% of currently employed respondents were confident they will maintain the same level of income through the first half of this year. As of February, 43% of respondents were living payday to payday and had just enough to get 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.

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