How is Unemployment Affecting Homeowners?

In a prior blog we shared observations and insights on the differences in housing insecurity among renters and homeowners.  In this blog, we investigate the impact of unemployment on homeowners based on their education attainment.    

Rise in unemployment has been the lowest among those with a college degree.

In Figure 1, we chart unemployment rate from March to June for people grouped on their educational attainment, as provided by the Bureau of Labor Statistics’ Current Population Survey.  The unemployment rate for those with less than a high school diploma (red line) is almost three times that of those with a Bachelor’s degree (green line). 

Figure 1.

About 70 percent of mortgagors have at least some college degree or higher.

Based on data from Census Bureau’s Household Pulse Survey, Figure 2 illustrates that approximately seven in ten homeowners with a mortgage have at least some college education, the group that has experienced the lowest levels of unemployment rate during the pandemic.

Figure 2.

Confidence in ability to pay is highest among those with college education. 

Based on data from Census Bureau’s Household Pulse Survey, Figure 3 shows that approximately 60 percent of owner-occupied households with a mortgage have exhibited a “high confidence” level in their ability to pay their mortgage obligations, even as the nation’s unemployment rate continued to rise.  Furthermore, Figure 3 illustrates that about three in four of those with a “high confidence” level tend to have at least some college education or higher.  Mortgagors with some college education also belong to the group that is likely earning the highest wages as per the Q2 2020 data released by BLS on weekly earnings by education attainment.

Figure 3.

SP Group continues to monitor the Household Pulse Survey (HPS)

The Census Bureau announced that they will continue to publish the HPS through at least October 2020.  SP Group will continue to monitor the data on housing insecurity patterns and its implications for the mortgage finance market.