Foreclosure Activity Is Still Lower than the Norm

Liz Kroft  |  January 31, 2024

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 Companyexplains:

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, let’s connect.


Recent Blog Posts

Stay up to date on the latest real estate trends.

Market News

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 re… Read more

Family

Is It Time To Buy a Smaller Home?

Life events can have a major impact on what you need from your home, and retirement is one of the biggest changes many of us face. This period of your life can mean do… Read more

Selling

A Seller's Guide to Navigating Today's Real Estate Environment

Unlock success in today's dynamic real estate market with expert seller strategies for attracting buyers today. Navigate market shifts, adapt to changing buyer needs, … Read more

Buying

Exploring 401(k) for Your Home Purchase: Wise or Risky?

Pondering the prospect of using your 401(k) for a home down payment? Our latest blog explores the implications, providing insights into the potential risks and viable … Read more

Welcoming Guillermo: A New Addition to Our Real Estate Team

We're thrilled to introduce you to the latest member of our real estate family, Guillermo Guadron – your dynamic partner with a rich tapestry of experience.

Buying

Client Success Story: How Savvy Buyers Outsmarted High Mortgage Rates

If you've been keeping up with recent articles on our blog and social media, you're likely already aware that today's real estate market can offer incredible opportuni… Read more

Homeownership Tips

What Are Accessory Dwelling Units and How Can They Benefit You?

Are you searching for your dream home but struggling to find one that aligns with your budget? Maybe you're already a homeowner looking for extra income or a place to … Read more

Buying

How Long Does Mortgage Pre-Approval Last?

A mortgage pre-approval letter is your key to securing a dream home. But how long does this golden ticket last? In this guide, we'll dive into the world of mortgage pr… Read more

Buying

Homebuyer Success Story: How Agent Reputation Helped Beat Higher Cash Offers

Discover an extraordinary client success story with the Kroft Hulsey Team, where love for Santa Cruz led to an unexpected turn of events in securing their dream home. … Read more

Say Hello

You’ve got questions and we can’t wait to answer them.