A promising sign of a return to the pandemic-ravaged economy has stalled: fewer lenders are resuming mortgage payments.
The proportion of homeowners who postpone mortgage payments has steadily declined from June to November, indicating that people are returning to work and the economy is starting to recover. But the decline has largely flattened since November, when the current wave of coronavirus cases has risen in communities across the country.
In the last two months or so, the group of homeowners stood at about 5.5%, according to the Association of Mortgage Banks. Although this fell from a peak of 8.55% in June, some economists are worried about the rate of blocking tolerance – and worry that it could even start to rise as the economy loses jobs.
Other data indicates a slowdown in the US economy this winter and greater pressure on household finances. Employers cut jobs last month for the first time since spring. The number of jobs has fallen and unemployment insurance claims remain high. Retail sales fell for three consecutive months.
“With declining recovery and more demand for unemployment, we will probably see increased demand for tolerance,” said Ralph McLaughlin, chief economist at Haus, a home start-up financing company. “One of the protection measures that people have, if they own a house, is to ask for tolerance.”