NASHVILLE, TN (WSMV) - The housing market in Nashville is still booming despite a pandemic-driven recession.
That’s because this year we’ve seen a low number of homes available, due to many people staying put because of COVID. But many Americans aren’t moving because about 6% of our country is in forbearance.
The inventory of houses for sale in Nashville is down 27% from year to year. However, buyers are still on the hunt, so the homes that are available are selling fast and for more money.
Economists said the low inventory is because many potential sellers are pressing pause on moving right now due to uncertainty of what will happen in the near future because of the coronavirus.
On the other hand, millions of Americans are taking advantage of a home loan forbearance, which is when your mortgage lender allows you to temporarily suspend paying your mortgage due to a financial hardship.
“We know that a lot of homeowners are actually in forbearance on their loans right now. This was enabled by the Cares Act last spring,” explains Jeff Tucker, an Economist for Zillow.
More than 3 million Americans are currently in forbearance.
The Cares Act has made it easy for homeowners to get anywhere from a three to 12 month deferment on their loan, if they are going through a hard time financially. However, once the 12 months are up, you have to resume your regular payments which, for many, will be by next spring.
“It’s really hard to say what will happen after those 12 months,” Tucker said. “This is totally uncharted territory. We haven’t had a forbearance program like this before in previous recessions and they weren’t driven by a pandemic like this. But I think the worst case scenario is that a significant fraction of borrowers may still be unable to pay their loans and then be forced to sell.”
The absolute worst case is starting the process of foreclosure. But experts say foreclosure isn’t as likely as it was back in the 2008 recession because, on average, people have more equity in their homes.