Categories: Property Management

Foreclosure Activity Is Still Lower than the Norm

Have you seen headlines talking about the increase in foreclosures in today’s housing market? If so, they may leave you feeling a bit uneasy about what’s ahead. But remember, these clickbait titles don’t always give you the full story.

The truth is, if you compare the current numbers with what usually happens in the market, you’ll see there’s no need to worry.

Putting the Headlines into Perspective

The increase the media is calling attention to is misleading. That’s because they’re only comparing the most recent numbers to a time where foreclosures were at historic lows. And that’s making it sound like a bigger deal than it is.

In 2020 and 2021, the moratorium and forbearance program helped millions of homeowners stay in their homes, allowing them to get back on their feet during a very challenging period.

When the moratorium came to an end, there was an expected rise in foreclosures. But just because foreclosures are up doesn’t mean the housing market is in trouble.

Historical Data Shows There Isn’t a Wave of Foreclosures

Instead of comparing today’s numbers with the last few abnormal years, it’s better to compare to long-term trends – specifically to the housing crash – since that’s what people worry may happen again.

Take a look at the graph below. It uses foreclosure data from ATTOM, a property data provider, to show foreclosure activity has been consistently lower (shown in orange) since the crash in 2008 (shown in red):

So, while foreclosure filings are up in the latest report, it’s clear this is nothing like it was back then.

In fact, 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, explains:

Foreclosure activity is still only at about 60% of pre-pandemic levels. . .”

That’s largely because buyers today are more qualified 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. mortgage delinquency rates remained healthy in October, with the overall delinquency rate unchanged from a year earlier and the serious delinquency rate remaining at a historic low… borrowers in later stages of delinquencies are finding alternatives to defaulting on their home loans.”

The reality is, while increasing, the data shows a foreclosure crisis is not where the market is today, or where it’s headed.

Bottom Line

Even though the housing market is experiencing an expected rise in foreclosures, it’s nowhere near the crisis levels seen when the housing bubble burst. If you have questions about what you’re hearing or reading about the housing market, connect with a real estate agent.

CMC

Recent Posts

Long-Term Storage Solutions for Frequent Movers

In today's fast-paced real estate market, frequent movers often face the challenge of managing their…

1 day ago

The True Cost of Being a Landlord in Long Beach (And How to Maximize Profits)

So, you’re thinking about becoming a landlord in Long Beach? Or maybe you already are…

2 days ago

Landlord Legal Traps: Avoid These Costly Mistakes in Long Beach

Owning rental property in Long Beach can be a smart investment, but one legal slip-up…

2 days ago

The Growing Trend of Short-Term Rentals: Insights for Property Owners

Short-term rentals have become one of the major developments in today's real estate industry. The…

4 weeks ago

Should You Allow Pets in Your Long Beach Rental? Pros, Cons, and Legal Considerations

You finally find the perfect tenant, someone who ticks every box: good credit, solid references,…

1 month ago

From Landlord to Partner: Why Tenant Relationships Matter Most

Landlords and tenants share more than just a business deal—they're actually in a kind of…

2 months ago