Renters Get Reprieve from CDC
Once the pandemic hit our shores and lockdowns ensued, many predicted that the real estate market would collapse. The logic behind such a dire prediction was that lockdowns would cause unemployment, which would cause renters and homeowners to fall behind on rent and mortgage payments. This all happened. However, it did not result in a real estate market crash similar to 2008 because of extraordinary government intervention. Instead, the real estate market went through the roof as home buyers and homeowners took advantage of historically low mortgage rates. These pessimistic prognosticators assumed that these government interventions did not prevent a market collapse, rather they merely kicked the can down the road. Their assumption is that as these measures expired, the collapse would arrive. Well, some of these measures just expired at the end of July potentially exposing many renters to eviction. Thankfully, these renters are getting a reprieve.
Expiration of the Federal Eviction Moratorium
One of the measures passed by the government to stop a potential real estate market collapse was a moratorium on evictions. There was a market purpose for this moratorium as well as a public health purpose. The public health purpose was to ensure that families could still quarantine themselves as the pandemic raged on. Forcing families out on the streets or to go live with others would only increase the risk of transmission. The market purpose for the eviction moratorium was to prevent real estate investors from losing a ton of money on unpaid rents. If millions of renters were evicted, then the available supply of units to rent would increase dramatically, which would tank prices. In turn, this could risk real estate investors defaulting on their mortgage payments, which could lead to foreclosures. As a result, an influx of homes for sale, which would decrease home values like 2008.
Ultimately, the eviction moratorium was seen as a short term fix. However, as the pandemic continued it has been extended multiple times. The Centers for Disease Control ended up extending the moratorium back in February until the end of March. President Biden then extended the moratorium again to run through June only to extend it again through the end of July. At the end of July, President Biden declined to extend the moratorium again citing potential legal challenges. Instead, he encouraged congress to extend it on their own. Congress ended up going on recess without passing an extension to the moratorium. Many thought this would be the end and that renters would be on their own. Thankfully, the CDC stepped in yesterday and took the step of extending the eviction moratorium themselves. Now, renters are protected from eviction through October 3rd.
What Happens When the Eviction Moratorium Ends?
Naysayers will be quick to point out that the government is not solving the pandemic-induced eviction crisis and are merely kicking the can down the road. However, the constant stream of extensions should be treated as good news for renters, real estate investors, and homeowners in general. It demonstrates a willingness by the federal government to continue to protect the real estate market as long as COVID remains a threat. Basically, as long as evictions pose a threat to the overall housing market it seems like extensions will be made and more measures will be implemented. Furthermore, the federal government is not the only entity taking action. Many states have implemented eviction moratoriums of their own. There seems to be a great willingness on governments of every level to prevent a widescale eviction disaster.
Aside from eviction moratoriums, all levels of government have passed additional measures to help renters and homeowners catch up on rent and mortgage payments. As a part of the most recent COVID stimulus package, congress included financial help for renters and homeowners. These funds were distributed to individual states and are designed to help those behind on rent and mortgage payments. The Consumer Financial Protection Bureau has created a website that provides all of the various resources available to renters and homeowners. This website provides renters and homeowners a way to learn about what type of help is available and how to access it.
Final Thoughts
Renters and homeowners should rest assured that measures are in place to help them not lose their homes. There are also resources in place that can help them catch up on rent and mortgage payments even if they are behind. This is great news for renters, homeowners, and home buyers. The much feared wave of evictions that is promised to take down the entire real estate market does not appear to be coming anytime soon. We saw the devastation that happened when the real estate market completely collapsed in 2008 and many are working hard to prevent that from happening again.
Homeowners will continue to benefit from a red hot housing market and see the value of their purchases increase. At the same time, home buyers can feel confident that they can buy the house of their dreams without its value plummeting. Overall, the real estate market is very healthy and now is a great time to take advantage of it. If you are interested in buying the house of your dreams and want a professional realtor to help guide you through the process, contact us. The team at Streamline Realty is here to help you turn your dream of owning a home into a reality.
