Amidst the COVID-19 pandemic and ensuing economic recession, the U.S. real estate market has also been facing a crisis. Millions of tenants around the country can’t afford to pay rent and mortgage defaults are piling up.
In response to the housing chaos, the Centers for Disease Control and Prevention (CDC) invoked public health emergency powers to stop evictions nationwide. Additionally, the Federal Reserve has purchased $1 trillion in mortgage bonds since March. This makes up 30% of the country’s outstanding mortgage bonds.
The Fed has purchased mortgage bonds at a record pace, starting with around $300 billion in bonds each during March and April. Since then, the Fed has bought around $100 billion in bonds per month.
The Fed now owns a third of bonds backed by loans in the U….