COVID-19: The Need for Consumer Outreach and Home Purchase/Financing Digitization
The widespread upheaval caused by the COVID-19 pandemic has impacted nearly every facet of daily life. Many individuals have faced significant financial distress, leading to the disruption of education, career paths, and retirement plans.
Recent data indicates a critical gap in how consumers access support during these crises. While many face imminent financial instability, a significant number remain unaware of the resources available to keep them in their homes.
The Awareness Gap in Housing Relief
Roughly one-fifth of surveyed consumers expressed concern regarding imminent financial distress. Despite this, most were unfamiliar with the mortgage and rent relief options designed to mitigate these risks.
For eligible homeowners, relief options may include the suspension or reduction of mortgage payments for a period of up to 12 months. Renters in certain financed multifamily properties may be afforded eviction protection if the property owner’s loan is in forbearance.
The lack of familiarity with these programs is not evenly distributed. Those with lower incomes are more likely to be concerned about paying bills and less likely to be aware of available relief options.
Demographic trends also show disparities in financial anxiety. White mortgage borrowers were less likely to worry about job loss or meeting financial obligations compared to other groups. Conversely, Asian mortgage borrowers were significantly more likely to be familiar with mortgage relief options than White, Hispanic, or Black borrowers.
Among renters, those with lower incomes, as well as Hispanic and Black renters, reported higher levels of concern regarding their ability to pay monthly bills.
Shifting Patterns in Housing Mobility
While many consumers believe the pandemic makes it a bad time to move, long-term expectations for moving have not changed significantly from historical trends.
Concerns regarding employment worsened during the second quarter of 2020. Those most worried about losing their jobs were the most likely to view the current environment as unfavorable for relocating.
Despite these immediate fears, consumers have not yet indicated a fundamental change in their overall moving behavior.
The Transition to Digital Housing Services
Consumer habits have shifted toward online shopping in general, but the housing market has been slower to adapt. Most respondents still prefer to conduct homebuying and renting activities in person.
However, there are signs of growth in digital adoption. Interest in selecting lenders and completing mortgage applications online increased over the course of the quarter.
Mortgage holders generally show a higher preference for completing key home shopping activities online compared to renters.
Potential Future Implications
The persistence of the “awareness gap” suggests that continued outreach and consumer awareness campaigns may be necessary to protect those suffering financial hardship.
While overall housing volume may not see a sustained impact, some consumers may adapt by seeking lower-cost housing than they would have considered prior to the pandemic.
The housing industry is likely to continue its digitization efforts, though the pace of demand for these digital resources may grow gradually rather than abruptly.
Frequently Asked Questions
What specific relief is available for homeowners impacted by COVID-19?
For those with qualifying mortgages, options include reduced or suspended mortgage payments for up to 12 months.
What protections exist for renters during the pandemic?
Renters in certain financed multifamily properties may receive eviction protection if the property owner’s loan is in forbearance.
Are consumers moving away from in-person homebuying?
While there is a growing interest in online mortgage applications and lender selection, most consumers still prefer to perform homebuying and renting activities in person.
How has your approach to managing your home or rental finances changed in response to recent economic shifts?