There’s no question the coronavirus pandemic has had a major economic impact all around the world. But Bankrate’s recent Housing Hardship Index reveals families in South Dakota are faring better than those in many other states
“We saw a lot here, but if you look at the grand scheme of things, not nearly as much as the rest of the U.S.,” Chris Volzke with CorTrust Bank said.
Volzke said South Dakota has seen an increase in mortgage delinquency since the pandemic started, but the rate here isn’t as high as other states.
“Mortgage delinquency probably around 7.75 percent, prior to the pandemic in the middle twos to three percent, so more than doubled, in South Dakota, we haven’t seen nearly that amount of delinquency here,” Volzke said.
Volzke says the delinquency rate has a strong correlation with the unemployment rate in each state.
“Yes our unemployment numbers have increased, but if you look at it as a percentage of unemployment numbers to overall population, look at that during the pandemic, South Dakota is one of the lowest and for a while we were the lowest, as far as number of people impacted,” Volzke said. “When you get to the East Coast you can be talking about 20 to 30 percentiles, many times more which is the main drivers why we haven’t seen quite the delinquency levels here.”
Still, the pandemic has put a financial strain on many South Dakota families.
“Everything from hospitality to health care workers to self employed people,” Volzke said.
“Just in the past month we opened it up to people who needed assistance with mortgages,” Helpline Center CEO Janet Kittams said.
The Helpline Center has received more than 200 applications from homeowners in the Sioux Falls area looking for help covering a mortgage payment.
“Eligibility requirements would be an individual who had income impacted because of COVID-19, they were furloughed, they lost hours, they lost their job because of COVID-19 or perhaps they were impacted because they actually tested positive and couldn’t go to work so they would be eligible for assistance,” Kittams said.
The One Sioux Falls Fund has already helped cover 135 mortgage payments, with another 40 approved applicants still pending. For those who couldn’t get assistance, the Cares Act did approve a forbearance program for many mortgages.
“Forbearance is not forgiveness…forbearance is a delay in your mortgage payments,” Volzke said. “Nationally forbearance rates are at about 8.5 percent right now. We saw only about 1.5 percent of our portfolio that requested forbearance in South Dakota.”
Volzke said another sign that the state’s economy is on the upturn is that more than half of the CorTrust Bank customers who requested a forbearance of their mortgage payment back in March or April have already paid back their delayed payments and are back on track.