Why today’s foreclosure numbers are nothing like 2008
You’ve probably seen headlines about how the number of foreclosures is increasing in today’s housing markets. You may have some questions, especially if are thinking of buying a home. If you want to understand what they mean, it’s important to know what is happening. According to a report by ATTOM, a provider of property data, foreclosure filings have increased 22% in the last year and 6% over the previous quarter. Media headlines may draw attention to the increase in foreclosure filings, but reporting only on this number can cause concern and even make you hesitate about buying a house for fear of a crash. While the number of foreclosures is increasing, it does not indicate a crisis in the market. It’s not the dramatic increase headlines would have you believeIn recent years, foreclosures have been at record lows. In 2020 and 2021, forbearance programs and other relief options helped millions of homeowners remain in their homes and get back on their own during a difficult period. Home values were also rising, so many homeowners who would have faced foreclosure in other circumstances could leverage their equity to sell their homes rather than face foreclosure. Equity will continue to play a role in preventing people from entering foreclosure. Just because foreclosures have increased doesn’t mean that the housing market is in danger. Clare Trapasso Executive News Editor of Realtor.com says: “There’s no need to panic, not yet.” Foreclosure filings started to increase. . . After the federal foreclosure moratorium was lifted. The moratorium was implemented in the early days COVID-19 when millions of Americans were losing their jobs to prevent a wave of homeowners losing their homes. Some of these proceedings were supposed to have occurred during the pandemic, but they were delayed by the moratorium. This is a little catch-up. “Basically, there won’t be a sudden flood in foreclosures. Some of the increase can be attributed to the delayed activity described above, while the majority is due economic conditions. Rob Barber, CEO at ATTOM, explains that this unfortunate trend can be attributed a number of factors including rising unemployment rates, foreclosures moving through the pipeline two years after government intervention, and ongoing economic challenges. The graph below shows how the situation has changed since the housing crash. The graph below shows that foreclosure activity is lower than it was before the crash. It looks at properties with foreclosure filings dating back to 2005. This is due to a number of factors, including the fact that buyers today are better qualified and less likely default on their loans. Today, foreclosures have dropped significantly from the high number reported during the housing crash. Bottom LineAt this time, it is more important than ever to put the data in context. While the housing market has seen an expected rise in the number of foreclosures, they are nowhere near the crisis level experienced when the housing bubble burst. This won’t cause a crash in the home prices.
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