The U.S. shed more than 22 million jobs in March and April 2020 as the economy felt the full impact of the pandemic shutdown. These jobs have been coming back, and as of February 2021, the U.S. has recovered 58% of the jobs lost in 2020. However, the job recovery has been felt differently across the country with some states showing full recoveries and others lagging far behind.
The Mountain-West region had strong employment growth with Idaho and Utah adding back more jobs in the past 10 months than they lost in March and April 2020 and Montana adding back 83% of jobs lost. Idaho, in particular, saw only a temporary slowing of its ongoing economic boom and has benefitted from residents leaving higher-cost areas.
On the low end, a strict shutdown and reliance on tourism negatively affected hiring in Hawaii, which has added back only 23% of jobs lost in 2020. New Mexico and California also had low job growth, adding back just 26% and 39% respectively.
Loss of income can trigger mortgage delinquencies and therefore stable employment trends are critical to the health of the mortgage market. The impact of last year’s job losses quickly fed into the mortgage market.
CoreLogic reported that new mortgage delinquencies spiked in April 2020 to the highest rate in over 20 years. This rate has since fallen back to pre-pandemic levels. While delinquencies increased in all states, Hawaii recorded the largest increase with the rate of new delinquencies in April 2020 more than six times the February 2020 rate. While many borrowers remain behind on their mortgage payments, ongoing forbearance plans protect them from losing their homes and from the delinquencies damaging their credit.
The U.S. job market has added back more than half of jobs lost in 2020, which has helped keep new delinquencies low. The rate of new delinquencies fell back down to pre-pandemic levels over the course of 2020 as the employment pictured brightened, which is encouraging news for homeowners. Economic growth in 2021 is projected to be the strongest in 37 years, which should expand jobs further and maintain a low rate of new delinquencies.
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