The theme this week on the One Minute Retirement Tip is 2021 Economic Predictions. 

Today, I’m talking about forbearance and foreclosure problem. 

90 million people moved into poverty during the pandemic, with low wage workers disproportionately hit the hardest. 90 million people! 

Among low wage workers, employment dropped by 35%. Many of the lowest wage jobs are in restaurants, hospitality, and other industries hit hardest by the Covid recession.

The Cares Act allowed for Americans to stop paying their mortgage and rent - otherwise known as forbearance. This kept millions of people out of foreclosure and millions of renters safe in their homes without worrying about evictions. 

But the trajectory of the recovery is uncertain and we may still see additional fallouts with foreclosures and evictions when forbearance expires. 

Looking at housing specifically, it seems like it’s entering bubble territory, like 2005 all over again. But is a housing crash coming in 2021? Plenty of signs point to no: inventory is really low, if we continue to emerge from the Covid recession renewed confidence may spark additional growth in home sales and prices, and there’s also very low interest rates and the work-from-home trend becoming a more permanent reality, driving many people to buy homes in 2021. 

But the frenzied home market is still cause for concern and I would be cautious about buying a home in 2021. Especially when we don’t yet know what the fallout will be from those 90 million people who moved into poverty in 2020 and who can not pay their rent or their mortgage. Keep in mind, many of these people will not have jobs to go back to when the Covid recession ends. Many of those jobs are permanently gone. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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