How the Recovery May Further Expose America’s Wealth Gap
The housing market is rebounding with unexpected strength, but as stimulus support measures come to an end, securing housing will be one more arena where America’s wealth gap will rear its head, according to Forbes. New home building and luxury apartments are not likely to be affected by the end of rent and mortgage forbearance, halt to evictions, and unemployment benefits. But those who are teetering on the edge of bankruptcy may find themselves unable to pay rent or mortgages in the coming months, leading to an increase in foreclosures and missed rent payments. And small business owners who were relying on small business loan programs to get through the pandemic may find that they do not have the resources to continue. In order to keep people renting during this economic strife, Forbes reports that apartment operators may offer incentives such as two to three months of free rent.
There is an old saying in the real estate development business: when a novice makes a mistake, it’s because they missed the nuances of the market; when a pro makes a mistake, it’s because they missed the obvious. Some participants in the residential sector have been applauding the resilience of homebuyer demand and rent collections while looking over their shoulder, bracing for a sudden slap in the face when the government “stimulus” winds down.
Is that slap really obvious, and real? And if so, will it be felt by the entire housing market, or only at certain levels of the market? We need to look a little deeper, because very little is obvious in this environment.
All agree that steps were taken very quickly to inject money into the economy and to provide relief for people with mortgages. These measures have included: