There is NO upcoming foreclosure crisis

Courtesy of Keeping Current Matters

While the number of foreclosure filings might be inching up, we’re nowhere near a foreclosure crisis. The market’s stable, buyer demand is strong, and homeowner equity is higher than ever.

Foreclosures Have Increased, But Not By Much

During the Great Recession, millions of homes went into foreclosure. There were over 1 million filings per year - not only are foreclosure numbers nowhere near where we were during the Great Recession, but they’re also still significantly lower than where they were before the pandemic.

In 2010, there were almost 3 million foreclosure filings in this country. In comparison, there were only about 357,000 last year.

As Rick Sharga, Founder and CEO of the CJ Patrick Company, explains: “Foreclosure activity is still only at about 60% of pre-pandemic levels. . .”

Now, let’s focus in on 2020 and 2021

Remember the foreclosure moratorium and forbearance programs during the pandemic? They were lifesavers for millions of homeowners, giving them a chance to bounce back during some seriously tough times.

When those programs wrapped up, it was inevitable that we’d see a bump in foreclosures. But here’s the key point: just because foreclosures are ticking up, it doesn’t mean there’s a crisis or a wave on the horizon.

We’re still below pre-pandemic numbers and way below the height of the housing crash in 2010.

One of the biggest reasons why is that homeowners are sitting on tons of equity right now. That means that even if they hit challenging times, they have options to use that equity to sell and avoid foreclosure altogether.

his perspective helps people understand why the market today is so much different than back in 2008.

As for what’s happening right now, the graph below says it all. All foreclosure metrics are down. That means active foreclosure inventory, foreclosure sales, and foreclosure starts are lower than they were a year ago.