The U.S. avoided one housing crisis, but another could be looming.
The United States averted the direst predictions about what the pandemic would do to the housing market. An eviction wave never materialized and the share of people behind on mortgages recently returned to its prepandemic level.
But a comprehensive report on U.S. housing conditions makes clear that while one crisis is passing, another is growing much worse.
Like the broader economy, the housing market is split on divergent tracks, according to the annual State of the Nation’s Housing Report released on Wednesday by Harvard’s Joint Center for Housing Studies. While one group of households is rushing to buy homes with savings built during the pandemic, another is being locked out of ownership as prices march upward. Those who bore the brunt of pandemic job losses remain saddled with debt and in danger of losing their homes.
For the past year, lower-income tenants have relied heavily on government support to pay their monthly bills. While those measures have helped, the majority of renters still had to borrow or draw on savings to cover bills.
With savings tapped out and unemployment benefits set to lapse, the financial damage to low-income households remains severe enough that they will need more support if they’re to recover along with the broader economy, the Harvard report said.
“Millions of households were financially unscathed coming out of the pandemic,” said Alexander Hermann, senior research analyst at the Joint Center for Housing Studies. “But the pandemic has left millions of others struggling to make their housing payments, especially lower-income households and people of color.”