February 15, 2023 at 10:21pm | Alice Siegel

Why You Shouldn’t Fear Today’s Foreclosure Headlines

Why You Shouldn’t Fear Today’s Foreclosure Headlines
If you’ve seen recent headlines about foreclosures surging in the housing market, you’re certainly not alone. There’s no doubt, the stories in the media can be pretty confusing right now. They may even make you think twice about buying a home for fear that prices could crash. The reality is, the data shows a foreclosure crisis is not where the market is headed, and understanding what that really means is mission critical if you want to know the truth about what’s happening today. Here’s a deeper look.

According to the Year-End 2022 U.S. Foreclosure Market Report from ATTOM, foreclosure filings are up 115% from 2021, but down 34% from 2019. As media headlines grab onto this 115% increase, it’s more important than ever to put that percentage into context.
While the number of foreclosure filings did more than double last year, we need to remember why that happened and how it compares to more normal, pre-pandemic years in the market. Thanks to the forbearance program and other relief options for homeowners, foreclosure filings were down to record-low levels in 2020 and 2021, so any increase last year is — no surprise — a jump up. Rick Sharga, Executive VP of Market Intelligence at ATTOM,  notes:

“Eighteen months after the end of the government’s foreclosure moratorium, and with less than five percent of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the COVID-19 pandemic. It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures.”
Clearly, these options meant millions of homeowners could stay in their homes, allowing them to get back on their feet during a very challenging period. With home values rising at the same time, many homeowners who may have found themselves facing foreclosure under other circumstances were able to leverage their equity and sell their houses rather than face foreclosure, and that trend continues today.
And remember, as the graph below shows, foreclosures today are far below the record-high 2.9 million that were reported in 2010 when the housing market crashed.

Why You Shouldn’t Fear Today’s Foreclosure Headlines
So, while foreclosures are rising, keeping perspective in mind is key. As Bill McBride, Founder and Author of Calculated Risk, noted just last week:

“The bottom line is there will be an increase in foreclosures over the next year (from record low levels), but there will not be a huge wave of distressed sales as happened following the housing bubble. The distressed sales during the housing bust led to cascading price declines, and that will not happen this time.”

 

Check out our FREE Market Evaluation Report and find out your home is worth!  
Let’s connect today to discuss the options that are best for you.
Watermark Real Estate Group: 843-989-0065

Bottom Line

Right now, putting the data into context is more important than ever. While the housing market is experiencing an expected rise in foreclosures, it’s nowhere near the crisis levels seen when the housing bubble burst, and that won’t lead to a crash in home prices.


Let's Connect Today!  📲
Radha Herring, Broker | 843-424-8811
rherring@watermarkagents.com
Watermark Real Estate Group
Big Corporate Experience | Small Business Heart
 
watermarkRE @yourmyrtlebeach @watermarkagents watermark-real-estate-group  Zillow Premier Agent | Radha Herring, Broker Watermark Real Estate Group @radhaherringrealtor Radha Herring, Broker | Watermark Real Estate Group

Share

check_circle

You message has been sent!

Send us a Message


You agree to receive automated promotional messages from YourMyrtleBeach regarding real estate information and education.Click here for terms and privacy policy. Message frequency varies. To opt out of receiving messages from me, text STOP to cancel. Reply HELP for help. Message and data rates may apply.