From the Philly Voice:
Pandemic policies have undoubtedly shaped the way the U.S. housing market has functioned throughout the health crisis, which has had countless ripple effects across different industries and walks of life.
Less often discussed is the impact of the federal government’s mortgage forbearance program, which has allowed homeowners to pause payments during the crisis. At its peak, more than 7.2 million homeowners were in the program, but the nation’s economic recovery helped give most of them the breathing room to organize a plan, whether it meant modifying a loan, selling to take advantage of the market or waiting out the storm for as long as possible.
At the beginning of October, the Biden administration has signaled strongly that it will let the program lapse after several extensions were made. And that’s a big deal for the roughly 1.7 million borrowers who remain enrolled.
Many of these homeowners, depending on their circumstances, may ultimately be forced or opt to sell their property while they still believe they can get an above-market deal. If short supply is one of the main drivers of the 17.2% increase in median home prices over the last year, then this influx of homes could have a noticeable impact, even if only modest, according to Fortune.
During the recent summer months, U.S. housing inventory already has climbed in small increments and a mild cooling effect has been seen across the market. Those who have been holding out for more normalcy and who aren’t willing to pay a premium for a home right now may be aided by an anticipated increase in homes that become available due to the end of mortgage forbearance.