You are not the only one if you have seen recent headlines about the rise in foreclosures in the housing market. The stories in the media can be quite perplexing at the moment. And they might even cause you to reconsider buying a house out of concern that the market might crash. However, there is no need to think twice. In order to know the truth about what is happening right now, it is crucial to know the context of these reports.
Foreclosure filings are up 8% from a year ago and 2% from the previous quarter. This is according to a recent report from property data provider ATTOM. But despite the rise in foreclosure activity, our numbers are still significantly below average. In spite of the data showing an increase, the market is not headed toward a foreclosure crisis.
The Great Recession of 2008 is Not this One
Real estate professionals have emphasized that this is not another Great Recession. Not all homeowners are unable to make their mortgage payments. Instead, a lot of lenders are just now catching up. If moratoriums hadn’t stopped the foreclosures, they would have happened during the pandemic.
Millions of foreclosures flooded the housing market in the years. This is after the housing crash, driving down prices. It’s not like that anymore. The majority of homeowners have ample equity in their properties. As a result of lenders not serving default notices during the worst of the pandemic, the number of foreclosures fell to all-time lows in 2020. Since then, there has been a slight increase in foreclosures, but not nearly as many as before.
And one of the experts, Sharon Lurye of Realtor.com elaborates:
“Not everyone who has a foreclosure filing is going to lose their homes in an ugly or financially devastating way. With home prices at record highs, homeowners are more likely to be able to sell their home if they can no longer keep up with payments—sometimes for a profit, which can help to cushion the blow.”
The Bottom Line
The current foreclosure activity is very far from 2008. That’s largely due to the fact that buyers today are more qualified. And they are less likely to default on their loans. Contextualizing the data is more crucial than ever. The best course of action for you to take to have a better understanding of the market. For you to have that, make sure to consult with your local expert.
What To Do:
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