COVID-19 has upended nearly every industry in some capacity, but the CDC's temporary halt on evictions has largely spared residents. However, as the moratorium is set to expire at the end of the year, real estate could be facing a crisis.
To avoid it, housing experts say the government must step in now.
"The ultimate solution is really to get this next stimulus package up and running so renters can receive the income that they need to be able to not just pay rent, but buy groceries, to put gas in the car, or to be able to go to work or look for another job if they're not currently employed," Bob Pinnegar, president of the National Apartment Association, told Cheddar.
It isn't just renters facing an impending catastrophe: some building owners and homeowners are in just as much trouble. With tenants unable to pay rent to cover mortgage and tax costs, owners could be forced into foreclosure, ultimately jeopardizing the nation's housing stock.
A lack of government assistance is leading to the expectation that renters could go into January with $70 billion in unpaid rent, Pinnegar said.
"Can we wait? No. Are we going to have to wait? Yes, and that is really a concern to everybody because all of the projections that we saw in July and August that were predicting a recovery through 2021, to get us back on our feet by 2022, assumed this stimulus would have already been here," he continued.
Currently, many banks are open to working with customers who are having trouble meeting mortgage payments and offering options like forbearance and deferments. According to Pinnegar, though, those periods of grace are likely to be axed, possibly creating "real economic damage on the housing market, which is going to impact housing affordability on the other side of COVID."
While the suburban housing markets have been hot during the pandemic, Pinnegar said urban areas could face an uphill battle when it comes to returning to normal.
"Suburban markets are definitely more attractive and people are moving there. I don't think that it's the end of downtowns and cities, but I do think it's going to take a while for those urban markets to recover," he explained.