Millions of homeowners are now financially vulnerable as a result of COVID-19, and in a Harvard Joint Center for Housing Studies report, Sharon Cornelissen and Alexander Hermann cover COVID-19’s potential. The researchers interviewed homeowners and housing stakeholders in Brockton, Massachusetts and analyzed national data on homeowners who rely on income from at-risk industries.
"The effects are already being felt in Brockton, a post-industrial city located 25 miles south of Boston that has seen a resurgent housing market and renewed activity in its struggling downtown over the last decade," JCHS said.
National data indicate that many people in other locales face similar challenges. Indeed, the jobs most at-risk to the current economic disruption are prevalent across the country. Collectively, these at-risk full-time workers lived in 24.9 million US households.
More than half of these households—59%, or 14.7 million in total—were homeowners, including 16% (4.1 million) with a mortgage. Overall, nearly one in five American homeowners (19 percent) were reliant on at least one household member employed in an industry now at risk due to COVID-19, including 22% of all homeowners with a mortgage.
Many of these households were already more vulnerable to economic shocks. For example, homeowners who exclusively relied on wages earned in at-risk industries had higher housing cost burden rates and lower household incomes on average compared to homeowners in less vulnerable industries.
Not all these households risk becoming cost-burdened or facing foreclosure. Even many workers in at-risk industries will keep their jobs. as JCHS notes, some who lose their jobs will be able to find other sources of income. With a quick recovery, most will be able to return to work or regain their hours.
While the financial impacts of COVID-19 on homeowners will become clearer over time, the severity of the problem requires an immediate and comprehensive response. “Solutions have to be big and bold,” said om Callahan Massachusetts Affordable Housing Alliance Director, “and probably have to be sustained over a multi-year period, so that we really do recover from this, and help people who were impacted.”