The end of forbearance and the capital markets

 The end of forbearance and the capital markets

One of the great questions facing the housing markets in 2021 is what will happen when the mortgage forbearance programs under the CARES Act expire. When this act was originally passed on March 27, 2020, there were notable concerns that these measures would merely postpone an inevitable correction in the housing market once the programs expired.

Since that time however, a powerful fiscal and monetary response brought mortgage rates to a record low and boosted household savings. In addition, an increase in the prospects for ongoing work-from-home arrangements combined with a growing preference for less dense living arrangements has led to a massive boost in the number of families looking to move.

The result has been an extraordinary acceleration in home price growth. According to the Federal Housing Finance Agency purchase only house price index, it took almost six years during the bubble period from 1998 to 2004 for…

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