From the course: Economics for Everyone: Housing Markets in Crisis

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Housing during the COVID recession

Housing during the COVID recession

From the course: Economics for Everyone: Housing Markets in Crisis

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Housing during the COVID recession

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- You know what the greatest leading indicator of a housing crisis is? It's foreclosures. Are mortgages getting foreclosed on? The leading indicator of that is if people are making their mortgage payments. If people aren't making mortgage payments, they're very likely to see their houses get foreclosed on. And if their houses get foreclosed on at a big enough number, that turns into a housing crisis. If we look back at the data from the 2007 to 2009 great recession and the housing crisis then, what we see is that 4.2% of mortgages at the peak were 30 to 89 days delinquent in January 2009. That was the single worst month for delinquencies. As the economy improved and recovered after that recession, well up until the COVID recession, this delinquency number went down and the housing market improved. This series is a critical leading indicator of what can happen in housing, because if people aren't making those…

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