Housing Market Gone Crazy (Day 289)

2020 ends with 2.8 million Americans in Mortgage Forbearance. Latest number, as of Jan 10, 2021, shows there are [5.37% mortgage loans are in forbearance](https://www.mba.org/2021-press-releases/january/share-of-mortgage-loans-in-forbearance-decreases-to-537-percent#:~:text=WASHINGTON%2C D.C. (January 19%2C,as of January 10%2C 2021.)

The mortgage delinquencies reach a 20-year high back in October 2020.

The market seems doomed from these figure, and considering how many people lost their job permanently, and possibly permanently, during the pandemic. The federal government has to extend the memorandum on no eviction or foreclosure from Jan 31 to Mar 31, 2021.

Losing jobs, behind on mortgages, landlords aren't able to collect rents, etc. All signs are pointing to a weak housing market. Wrong! We are seeing the best housing market since 2006 in the United States!

Well, let's consider what's going on the demand side. Because of the pandemic, many jobs could turn 100% remote, and people who are living in the high housing cost markets will be tempted to leave. In fact, there's an estimate that 10% of American could be relocating.

With the pandemic, we are staying at home more than ever. The desire to own a home could be stronger, and the options are available--historically low interest rate, stock market has been doing good, and now even Bitcoin is back in the bull market. Also, a weak dollar (due to printing money for the stimulus packages), and if renters can stop paying rent yet can't be evicted, for almost a year, that'd be help saving up for down payments (hypothetically). All these factors are creating a great demand for housing in most markets. Among the new buyers, 38% are the millennials.

I wonder how long the demand would continue, and what's gonna happen when the no eviction or foreclosure memorandum ends, how the market might change.

Share your thoughts in the comments!

Image credit: https://locallifetx.com/2017/01/how-to-survive-a-hot-housing-market/