Published January 26, 2021

The Cromford Report On The CARES Act, Eviction Moratorium, Homeownership And Renting In The Phoenix Metro Area

Written by Shanna Day Team

The Cromford Report On The CARES Act, Eviction Moratorium, Homeownership And Renting In The Phoenix Metro Area header image.

The 2020 global pandemic highlighted all the more the advantages of homeownership over renting. While renters remain at risk of eviction for missing just at least one rent payment, homeowners usually miss more than one monthly payment before a lender files a Notice of Trustee Sale- and that's under normal circumstances in Arizona. And even when a lender takes such action, an additional 90 days is afforded to the homeowner to remediate before foreclosure.

The end of the eviction moratorium on December 31st gave rise to concerns from housing experts about an eviction crisis affecting renters; on the other hand, only a few predict a foreclosure crisis for homeowners.

And why the continued confidence in homeownership? Consider these five options homeowners looking at the end of a forbearance period can consider:

1) Consult your retirement plan administrator about tapping into your retirement account without penalty until December 31st to cover your unpaid payments;

2) Consult a lender about refinancing your unpaid payments into a new loan;

3) Rent your home for more than your mortgage payment to cover missed payments or replenish your retirement account;

4) Consult a lender about acquiring a new loan on a more affordable home;

5) Sell your home for more than your mortgage balance, walk away with your equity and credit intact to buy another day.

The first three options allow you to stay at your home while the last two have you moving out. These options will help reduce the risk of a foreclosure crisis and price crash in 2021; back in the 2008 housing crash, homeowners didn't have these recourses.

In addition, the CARES Act allow homeowners to postpone payments starting in three month increments up to a year without their credit being affected. On the contrary, renters have no such options.

Another thing to note is that despite the 25,549 permits issued and 19,889 sales closed on brand new single family homes through October 2020, population growth continues to outpace housing growth in the Greater Phoenix area each year for the past decade. Projections foresee rents to climb next year, and so will home values.

So one more time, why buy over renting a home? The market value for owning a home immediately jumps to mind but just as important is the stabilizing monthly housing costs and the added protection provided to homeowners during times of financial and work uncertainty.