The fallout from the coronavirus pandemic continues to severely impact economic activity across the nation while consumer attitudes have plunged. Stay-at-home restrictions, the closing of many businesses along with nearly 27 million people claiming first-time unemployment benefits reflects the sharp contraction in economic activity from COVID-19. The April Consumer Confidence Index fell to 86.9 from 118.8 in March and was the largest monthly decline since 1973 and the lowest level since 2014. Lynn Franco from the Conference Board said, "Consumers’ short-term expectations for the economy and labor market improved, likely prompted by the possibility that stay-at-home restrictions will loosen soon, along with a re-opening of the economy."
Just before the coronavirus hit here in the U.S. home price gains were beginning to percolate in February due to low rates, tight supplies and strong demand. The Case-Shiller 20-City Index rose by 3.5% annually in February from 3.1% in January and was up 0.4% monthly from January to February. National Home Price NSA Index, which covers all nine U.S. census divisions, rose 4.2% annually, up from 3.9% in the previous month, 0.5% monthly. Craig J. Lazzara said, "As much of the U.S. economy was shuttered in March, next month’s data may begin to reflect the impact of these policies on the housing market.”
Freddie Mac and Fannie Mae cleared up one important question on the minds of those in forbearance on mortgages due to the coronavirus pandemic. The question is what happens at the end of the forbearance as the missed payments will have to be paid back in one way or another. The CARES Act puts forth that a mortgage backed by the government or by the GSEs, that is in forbearance, does not have to pay back the missed payments in one lump sum. There are essentially three options that borrowers can enter into such as a repayment plan, payment deferral or modification, or modification of the loan.
Home prices gains up before COVID-19 hit the U.S. Forbearance question cleared up.
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