The U.S. housing market, which seemed headed off a cliff in April, now looks like it’s returning to some semblance of normal. The quiet may not last long.

The initial chaos caused by the coronavirus pandemic has given way to an eerie calm, housing-industry executives say. Unemployment is near record highs, yet home prices keep rising. Lenders that in March warned of imminent collapse are now getting crushed by a surge in mortgage applications. Even some private-mortgage issuers, which don’t have government backing and are typically the most risk-averse in a recession, have come back into the market and say their mortgage-bond offerings have been oversubscribed.

But even amid the welcome surprise, there are signs some homeowners and renters are hanging on by a thread. Many Americans who have lost a job say they’re continuing to make rent or mortgage payments but aren’t certain how long that can last.

“With such elevated levels of unemployment, many households are experiencing very challenging financial distress,” said CoreLogic chief economist Frank Nothaft. “Without some additional program or support, whether at the federal or state level, they will have a lot of difficulty meeting all their payments.”

Bleeding Stanched
Much of the initial bleeding was stanched by the $2.2 trillion stimulus package passed by Congress in March. In addition to billions of dollars given to small businesses to maintain payrolls, Congress increased unemployment benefits by $600 per week. The law also allows borrowers with a government-backed mortgage to delay payments for as long as a year if they claim a pandemic-related hardship.

The various programs were more than enough to keep most renters and borrowers on track. Some Americans are receiving more money from federal pandemic payments than they did from their jobs.

Calls to Apprisen, an Ohio-based nonprofit credit counseling service, are down 11% from a year earlier. Financial counselor Sarah Gardner said the weekly $600 pandemic payment made many struggling homeowners ineligible for a federal mortgage-assistance program she used before the pandemic.

But with the $600-per-week set to expire at the end of July, there are signs homeowners and renters could slip.

About 9.1 million borrowers told the Census Bureau in June that they had not made last month’s mortgage payment after their household lost employment income during the pandemic. But 10.7 million said they had slight to no confidence that they’d make their payment next month.

Declining Confidence
Renters are even more on edge. About one in four rental households that lost income said they missed last month’s rent payment, according to the Census. One in three said they have little to no confidence they’ll pay next month.

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