its own evictions protections that run through the end of the year.) For homeowners, Congress also passed mortgage forbearance for up to a year, as well as a temporary freeze on foreclosures. The Federal Reserve slashed interest rates to a range of 0% to 0.25%, which in turn pushed mortgage rates down.
For one, people are spending more time in their homes, fueling demand for bigger living spaces, often outside major cities. According to the Harvard study, new construction permits are growing fastest in suburban neighborhoods of small metro areas, reversing a decade-long trend of urban growth. Additionally, data from moving company United Van Linesthat people have left large metro areas, including San Francisco, Seattle, and New York, at higher rates in 2020 than 2019.
Meanwhile, that capital is getting harder to come by. Lower interest rates means cheaper mortgages, but they also make it harder to save in the first place via traditional rate-based accounts. “The Federal Reserve has a blunt tool: lower interest rates,” says Daryl Fairweather, chief economist at Redfin. “That only helps people who have access to credit. You only get that loan if you can pay it back. If you lost your job, you’re not going to benefit.
Indeed, it’s hard to climb the real-estate ladder if the first step is out of reach. That’s the case for many lower-income Americans who don’t have enough money to make the investment, particularly in this economic climate. Renters have been more likely to experience job losses since March, while nearly 9 million households that rent homes, or about one in six, are behind on payments, according to Census BureauThe housing disparities are especially pronounced along racial lines.