Freddie Mac: Confidence in Housing Market High as Concerns about Finances Linger

Rhea-AI Summary

Freddie Mac (OTCQB: FMCC) has released a survey indicating improved confidence among renters and homeowners regarding their ability to pay housing costs amidst the pandemic. The survey reveals a decline in concern about payment ability from 71% in November 2020 to 63% for renters and 45% to 41% for homeowners by February 2021. Additionally, 72% of employed respondents are confident in maintaining their income. Freddie Mac has implemented various support initiatives, including forbearance programs and eviction suspensions affecting over 4.2 million units, showcasing their commitment to aiding families during this challenging economic period.

Positive

• Improved payment confidence: Renter concern dropped from 71% in November to 63% in February 2021; homeowner concern fell from 45% to 41%.
• High employment confidence: 72% of employed respondents expect to maintain their income.
• Support initiatives: Freddie Mac's forbearance programs have helped nearly 100,000 families and suspended evictions until June 30, 2021.

Negative

• Despite improvements, 63% of renters and 41% of homeowners still express concern over their ability to make payments as of February 2021.
• 43% of respondents are living paycheck-to-paycheck, with 17% unable to afford basic needs until their next payday.

MCLEAN, Va., March 22, 2021 (GLOBE NEWSWIRE) -- New Freddie Mac (OTCQB: FMCC) research shows the uncertainty renters and homeowners have about their ability to pay their rent or mortgage during the pandemic. This survey, of which two-thirds of respondents are homeowners and one-third are renters, shows that although homeowners and renters continue to feel the economic pressure of the pandemic, those figures have improved and are down from the all-time high reached in October and November of 2020.

“Freddie Mac is focused on understanding how consumers are thinking about their current and future financial situation amid a pandemic,” said Donna Corley, executive vice president and head of Single-Family Business at Freddie Mac. “While the housing market appears to be healthy and has recovered faster than the rest of the economy, many segments of the population are still struggling. To date, we have helped hundreds of thousands of borrowers get and stay current on their mortgage, and we continue to work with our conservator and industry partners to offer ongoing support.”

“The pandemic has been economically devastating for millions of Americans, and those who rent have been hit the hardest,” said Debby Jenkins, executive vice president and head of Multifamily Business at Freddie Mac. “In the early days of the pandemic, we acted quickly to help remove the threat of eviction for residents of the more than 4.2 million multifamily units we helped finance, and that protection is ongoing for nearly 100,000 families as a result of our Multifamily forbearance program.”

Key points within the survey include the following:

Concern About Housing Payment
Throughout 2020, more than half of surveyed renters remained concerned about their ability to make housing payments, fluctuating between 54% (April) and 71% (November) during the year. In December, renter concern showed a slight improvement at 67% and dropped to 63% in February 2021. Meanwhile, over the course of 2020, homeowner concern about making payments fluctuated between 33% (June) and 55% (October), ending the year at 45%. Those numbers have further improved to 41% in February 2021. As of December 2020, 27% of homeowners and 35% of renters had asked for a housing payment postponement, most commonly due to uncertainty over making payments beyond the next one. By February of this year, those numbers dropped to 19% of homeowners and 28% of renters.

Confidence in the Housing Market is High
Confidence in the housing market fluctuated between 48% (April) and 69% (October) but remained high overall, averaging 60% in all of 2020. As of February 2021, confidence has improved to 66%. During 2020, renters were more likely than existing homeowners to buy homes, with many shifting into homeownership through the late summer and early fall. The likelihood of homeowners to sell their homes (18%) and renters looking to purchase a home (34%) has held steady since the beginning of 2021. Likewise, refinance activity remains strong, with nearly a third of homeowners indicating they were likely to refinance their home within the first six months of this year.

A Challenging Economy Presents Personal Finance Issues
While many homeowners and renters are struggling financially, 72% of currently employed respondents were confident they will maintain the same level of income through the first half of this year. As of February 2021, 43% of respondents were living payday-to-payday and had just enough to get by, while 17% didn’t have enough for the basics until the next payday. Forty percent cited that they had enough to go beyond payday.

Since the beginning of the crisis, Freddie Mac has taken numerous actions to help struggling homeowners and renters with financial hardships related to COVID-19. Most recently, foreclosures and evictions have been suspended until June 30, 2021, and forbearance programs are now available for a period of up to eighteen months. For more information, visit the Freddie Mac consumer education website, My Home^® by Freddie Mac.

To assist the industry at large, the company announced #HelpStartsHere, a campaign that offers clear, direct access to important resources for borrowers and servicers who need options in the current environment.

Freddie Mac also leverages its Borrower Help Centers and a national Borrower Help Network, which are trusted nonprofit intermediaries that offer free assistance, including a full suite of financial education and mortgage help services. For renters who are struggling to pay their rent, the company also launched a renter helpline where HUD-certified housing counselors provide free counseling.

Partnering with Heart+Mind Strategies, this COVID-19 Tracking Poll has been fielded on a biweekly or monthly basis, depending on market conditions since March of 2020 where 1,000-1,035 individuals responded to the questions based on what they have been experiencing during this uncertain time.

Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we’ve made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders, investors, and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac, and Freddie Mac’s blog FreddieMac.com/blog.

MEDIA CONTACT:
Angela Waugaman
703-714-0644
Angela_Waugaman@FreddieMac.com

FAQ

What does the Freddie Mac survey reveal about renter concerns in 2021?

The survey reveals that renter concern about making housing payments decreased from 71% in November 2020 to 63% in February 2021.

How did homeowner payment concerns change according to the Freddie Mac survey?

Homeowner payment concerns declined from 45% in December 2020 to 41% in February 2021.

What level of confidence do employed respondents have about their income?

72% of currently employed respondents are confident they will maintain their same level of income through the first half of 2021.

What support initiatives has Freddie Mac implemented during the pandemic?

Freddie Mac has suspended evictions until June 30, 2021, and launched forbearance programs benefiting nearly 100,000 families.

What percentage of renters and homeowners requested housing payment postponements?

In December 2020, 35% of renters and 27% of homeowners requested payment postponements, which decreased to 28% and 19%, respectively, by February 2021.