Moratoriums expire and that means evictions & foreclosures are set to spike. As 17 million American renters and homeowners are behind on their housing payments, and the national moratoriums preventing evictions and foreclosure during the COVID-19 pandemic expired on July 31. Adam Taggart explains why the next few months will be chaotic — and likely painful — ones for society, the housing market, and the economy.
On July 31, two year-long national moratoriums preventing evictions and foreclosures expired.
Millions of renters and homeowners collectively owe many tens of $billions on their residences.
How many of them will lose their homes?
The government is way behind on distributing aid earmarked to help. And as it tries to resume the moratoriums, it faces a constitutional challenge by the courts, as well as an uprising by legions of small-scale landlords & lenders on the brink of financial crisis due to lack of income.
How will this mess resolve? Not well at all it appears.
There’s a double-punch of bad news ahead for the struggling Americans: much of the pandemic-related federal unemployment assistance still being offered to 13+ million people is ending soon, JUST AS these moratoriums are lifting.
The American Rescue Plan, which extended unemployment insurance and boosted “stimmie” checks by $300/week — along with the Pandemic Emergency Unemployment Compensation (PEUC) and the Pandemic Unemployment Assistance (PUA) programs — expires on Labor Day..
These twin developments will cause millions of US households to downshift financially, which will likely have a dampening effect at the margin for the economy as well as the financial markets.
But so far the stock market is complete ignoring this imminent reckoning. Back at record highs, it’s priced as if it’s only going to be smooth sailing from here.