Why Today's Foreclosure Figures Aren't Similar to 2008
You might have seen the news about foreclosures increasing in the housing market lately. This could make you wonder about buying a house. To know the real situation, it's important to understand what these headlines mean.
A recent report from ATTOM, a company that gives property information, says that foreclosure filings have gone up 6% from the last quarter and 22% from a year ago. The news focuses on this increase, which could make you worried and rethink buying a home because you fear prices might fall. However, the data shows that the market is not heading toward a foreclosure crisis.
Let's see how this information compares to the past.
Foreclosure Increase Isn't as Bad as It Seems In the last few years, foreclosures have been very low. This is because programs in 2020 and 2021 helped many homeowners keep their homes during tough times. Also, rising home values let some people sell their houses instead of facing foreclosure. Having equity in a home can help prevent foreclosures in the future.
When the government's foreclosure freeze ended, it was expected that foreclosures would rise. But this doesn't mean the housing market is in trouble. Clare Trapasso from Realtor.com says we don't need to worry yet. Foreclosure filings started going up after the freeze ended, but some of these were just delayed because of the freeze. This is like catching up on what didn't happen during the pandemic.
So, there isn't a sudden rush of foreclosures coming. Some of the increase is due to delayed activity, while other reasons include economic issues. Rob Barber, the CEO of ATTOM, says that things like higher unemployment rates, foreclosure filings going through after two years of government help, and other financial challenges cause this trend. However, since many homeowners have a lot of home equity, it might help prevent a big increase in foreclosure activity.