Some people are sounding the bells to indicate that we’re destined for a repeat of the crash we saw in 2008 because of a “Flood of Foreclosures.” Don’t listen to them! Here are three reasons why that is not going to happen.
There will be no flood of foreclosures in the coming year. If you are waiting for a flood of foreclosures to hit the market so you can get a deal on a house, you might miss some opportunities NOW.
- Not as many homeowners are in trouble this time.
- There have been fewer foreclosures due to protections put in place during the pandemic.
- Most homeowners have significant equity in their homes.
“For the second quarter in a row, the mortgage delinquency rate fell to its lowest level since MBA’s survey began in 1979 – declining to 3.45%. Foreclosure starts and loans in the process of foreclosure also dropped in the third quarter to levels further below their historical averages.” – Mortgage Bankers Association
Homeowners have very high levels of tappable home equity today, providing a cushion to withstand potential price declines, but also preventing housing distress from turning into a foreclosure. . . the result will likely be more of a foreclosure ‘trickle’ than a ‘tsunami.’” – First American
“Only about 214,800 homeowners were facing possible foreclosure in the second quarter of 2022, or just four-tenths of one percent of the 58.2 million outstanding mortgages in the U.S. Of those facing foreclosure, about 195,400, or 91 percent, had at least some equity built up in their homes.” – ATTOM Data
If you see headlines about the increasing number of foreclosures today, remember context is important. While it’s true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years. If you have questions, let’s connect.
Jennifer Blanchard Team
Berkshire Hathaway HomeServices NJ Properties