Foreclosure Activity Is Still Lower than the Norm

Have you seen headings speaking about the boost in foreclosures in today’s housing market!.?.!? If so, they may leave you feeling a bit uneasy about what’s ahead. But keep in mind, these clickbait titles do not constantly provide you the complete story.

The reality is, if you compare the existing numbers with what generally happens in the market, you’ll see there’s no need to worry.

Putting the Headlines into Perspective

The boost the media is calling attention to is deceiving. Due to the fact that they’re just comparing the most recent numbers to a time where foreclosures were at historical lows, that’s. Which’s making it sound like a bigger offer than it is.

In 2020 and 2021, the moratorium and forbearance program assisted millions of homeowners stay in their homes, allowing them to get back on their feet throughout an extremely tough period.

When the moratorium came to an end, there was an anticipated increase in foreclosures. Just due to the fact that foreclosures are up does not indicate the real estate market remains in problem.

Historic Data Shows There Isn’t a Wave of Foreclosures

Rather of comparing today’s numbers with the last few unusual years, it’s better to compare to long-lasting trends– specifically to the housing crash– since that’s what people worry may take place once again.

Take a look at the chart listed below. It utilizes foreclosure data from ATTOM, a home data provider, to reveal foreclosure activity has actually been consistently lower (shown in orange) given that the crash in 2008 (shown in red):

So, while foreclosure filings are up in the latest report, it’s clear this is absolutely nothing like it was at that time.

We’re not even back at the levels we ‘d see in more normal years, like 2019. As Rick Sharga, Founder and CEO of the CJ Patrick Company, describes:

“Foreclosure activity is still just at about 60% of pre-pandemic levels…”

That’s largely since buyers today are more certified and less likely to default on their loans. Delinquency rates are still low and most homeowners have enough equity to keep them from going into foreclosure. As Molly Boesel, Principal Economist at CoreLogic, says:

“U.S. home mortgage delinquency rates stayed healthy in October, with the overall delinquency rate unchanged from a year earlier and the severe delinquency rate remaining at a historical low … debtors in later stages of delinquencies are finding alternatives to defaulting on their mortgage.”

The reality is, while increasing, the information reveals a foreclosure crisis is not where the marketplace is today, or where it’s headed.

Bottom Line

Although the housing market is experiencing an expected increase in foreclosures, it’s nowhere near the crisis levels seen when the real estate bubble burst. If you have concerns about what you’re reading or hearing about the housing market, let’s connect.

The increase the media is calling attention to is misleading. That’s since they’re just comparing the most current numbers to a time where foreclosures were at historical lows. Take an appearance at the graph listed below. We’re not even back at the levels we ‘d see in more normal years, like 2019. Even though the housing market is experiencing an expected rise in foreclosures, it’s no place near the crisis levels seen when the real estate bubble burst.