Coronavirus hasn't halted home sales, but could hurt mortgage payments
Nearly 80% of those that purchased a home in 2020 are concerned about making their mortgage payment in the coming months due to the coronavirus, according to a Clever Real Estate survey.
"Recent homebuyers have had very different experiences than those who purchased their homes before the pandemic," Clever said in an online report on the survey results. "Most notably, they experienced more negative affect related to homeownership, higher levels of buyer's remorse, and more concerns about finances than those who bought between 2015 and 2019."
"[This year's] homebuyers are more than twice as likely to report feelings of anxiety and stress than homebuyers who bought in the last five years, and they're less likely to report feelings of comfort, security, happiness and pride."
Only 56% of 2020 homebuyers are paying their mortgage in full each month, the survey found, which falls to 45% if one of the financial contributors to the payment has lost his or her job.
In an earlier survey of people who owned homes prior to April 28, 83.6% of borrowers said they were able to make their mortgage payments as usual.
Among those 2020 homebuyers that are not making their full monthly payment, 55.4% are making lower payments per an agreement with their lender, while 26.1% have an agreement to defer their payments. For the average homeowner, the comparative numbers are 41.4% and 48.1%, respectively.
But 18.5% of recent purchasers and 10.6% of average homeowners are behind on their mortgage and do not have an agreement with their lender, "suggesting that more recent buyers were less financially prepared for the pandemic," the survey report said.
While 58% of 2020 homebuyers were concerned about ending up underwater on their mortgage because of the pandemic, this particular fear was greater among those that bought prior to lock-down, according to the survey, which was conducted between May 31 and June 2.
Among pre-pandemic 2020 buyers, 63.7% were concerned about owing more money than their house was worth because of COVID-19. But just 53.2% of those that have purchased in recent weeks had a similar worry.
"The discrepancy between pre-pandemic and during-pandemic 2020 buyers is likely due to expectations: Those who purchased a home during the pandemic had expectations that the market was slowing down and may have purchased accordingly, whereas those who bought a home before March this year were under the impression that the housing market in the U.S. was going strong," said Clever.
So far home values have not depreciated tremendously. A recent Zillow survey of economists and real estate experts found respondents generally expect further price declines in 2020, followed by a quick rebound next year.