A hundred thousand Connecticut homeowners and more than 170,000 tenants are at risk of missing mortgage or rent payments because of job losses related to COVID-19. That’s according to an analysis by the Federal Reserve Bank of Boston.
Nicholas Chiumenti, the author of the report, says a third of all households in New England, both renters and homeowners, are at risk of missing their monthly housing payments. This is despite the temporary $600 a week increase in unemployment benefits.
“The cost of living in New England is also much higher than a number of other states in the country. That obviously affects the ability of households to afford where they live.”
He says in Connecticut the missed rents would amount to about $188 million per month and missed mortgages would be about $178 million.
Eric Rosengren, president of the Boston Fed, says the reserve bank has taken some steps to prevent a crisis.
“We’ve lowered interest rates to zero. We’ve bought lots of mortgage-backed securities, treasury securities. And all these facilities are designed to make sure that there continues to be a flow of funds to households and businesses at reasonable rates.”
UConn economist Fred Carstensen says additional action from Congress is needed to avert a crisis.
“A major infrastructure initiative would be immensely helpful, both for our own economic competitiveness, but also it would give businesses the confidence that aggregate demand is going to grow and therefore they can go and they can make investments and expand because they know the demand for their goods and services would be there.”
In the meantime, an executive order from Governor Ned Lamont prohibits Connecticut landlords from beginning eviction proceedings before July 1. And a new law in New York extends emergency rent relief through July 31 and grants another 180-day forbearance period on mortgages.