While the nation’s housing and mortgage markets aren’t causing the broader economic disruption during the COVID-19 crisis, as they did in the last, they are suffering from its effects.
A new brief published by the Urban Institute – titled The Mortgage Market Has Caught the Virus – discusses how these markets are straining under the weight of the disruption, what policymakers should do about it and what longer term implications we should draw from the experience.
One observation highlighted by the authors focuses on the role of the Federal Reserve during the pandemic, “The Fed’s efforts have been heroic and unprecedented. Its purchase of $292.2 billion of agency MBS in March amounted to 178% of the total amount of agency securities originated that month, easily exceeding any month during the last financial crisis. Now aware that the Fed will buy as much as needed to stabilize the market, investors will likely need the central bank to purchase less going forward. Indeed, its purchases have slowed in recent weeks.”
The Mortgage Market Has Caught the Virus
