COVID-19 has wreaked havoc on the economy and incomes of scores of Americans as struggling businesses have been compelled to lay off workers, according to Wallet.hub.com.
While the job market has rebounded, unemployment has remained stalled at 10.2%,, while state economies—without exception—have at least partially opened their doors again, many stakes, prompted by spikes in the pandemic, have put a freeze on advancing to the next level of reopening.
Furthermore, due to the inability of Congress to greenlight an additional stimulus package prior to the lapse in benefits stemming from the initial one, the economy is expected to be mired in the damage done by CODIV-19 for some time. To remain float, Americans have had no recourse other than to borrow money.
Meantime, they’re seeking salvation through means such as home equity and payday loans. But those options aren’t for everyone, with interest in them varying from state to state.
WalletHub compared the 50 states and District of Columbia across four key metrics combining internal credit report data with data on Google search increases for three loan-related terms. The comparison showed that people required loans, such as mortgage/home loans, the most in New York, followed by Oklahoma, Tennessee, Missouri and Maryland.
The housing affordability crisis has only escalated following the onset of the pandemic, due to which more than 36 million Americans have filed for unemployment. More than 4 million people have entered into forbearance plans to either defer or pay reduced amounts on their mortgages.
Meantime, there’s been no hint of abatement in the acceleration of home prices.
To address the state of affordability in America, tightening lending standards, further inventory strain with a possible suburban boom, and just how long the virus’ impacts could last, leaders at the Inlanta Mortgage, TD Bank, and the American Enterprise Institute’s Housing Center, as well as economists from Freddie Mac, First American Mortgage Solutions, Realtor.com, and others weighed in.
When discussing affordability, Steve Kaminski, Head of US Residential Lending for TD Bank stressed the importance of looking at the consumer’s financial position.
“It was at a very strong point coming into the pandemic. The ratio of debt service to disposable income was at historic lows, unlike prior to the liquidity crisis of the Great Recession, where there was a lot of stress on the borrower’s financial position,” Kaminski said. “Comparing the high debt levels of that time versus consumers’ current position, which is much stronger, debt was the lowest it’s ever been, frankly.”