{"id":2657,"date":"2022-05-12T12:53:16","date_gmt":"2022-05-12T12:53:16","guid":{"rendered":"https:\/\/phphouses.com\/blog\/?p=2657"},"modified":"2022-05-12T12:53:16","modified_gmt":"2022-05-12T12:53:16","slug":"actually-need-know-number-foreclosures-todays-housing-market","status":"publish","type":"post","link":"https:\/\/phphouses.com\/blog\/actually-need-know-number-foreclosures-todays-housing-market\/","title":{"rendered":"What You Actually Need To Know About the Number of Foreclosures in Today\u2019s Housing Market"},"content":{"rendered":"
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What You Actually Need To Know About the Number of Foreclosures in Today\u2019s Housing Market<\/p><\/div>\n

While you may have seen recent stories about the volume of foreclosures today, context is important. During the pandemic, many homeowners were able to pause their mortgage payments using the forbearance program. The goal was to help homeowners financially during the uncertainty created by the health crisis.<\/p>\n

When the forbearance program began, many experts were concerned it would result in a wave of foreclosures coming to the market, as there was after the housing crash<\/a> in 2008. Here\u2019s a look at why the number of foreclosures we\u2019re seeing today is nothing like the last time.<\/p>\n

1. There Are Fewer Homeowners in Trouble <\/strong><\/h4>\n

Today\u2019s data shows that most homeowners are exiting their forbearance plan either fully caught up on payments or with a plan from the bank that restructured their loan in a way that allowed them to start making payments again. The graph below depicts those findings<\/a> from the Mortgage Bankers Association<\/em> (MBA):<\/p>\n

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Loans Upon Exiting Forbearance Program<\/p><\/div>\n

The same MBA report mentioned above estimates there are approximately 525,000 homeowners who remain in forbearance today. Thankfully, those people still have the chance to work out a suitable repayment plan with the servicing company that represents their lender.<\/p>\n

2. Most Homeowners Have Enough Equity To Sell Their Homes<\/strong><\/h4>\n

For those who are exiting the forbearance program without a plan in place, many will have enough equity<\/a> to sell their homes instead of facing foreclosures. Due to rapidly rising home prices<\/a> over the last two years, the average homeowner has gained record amounts of equity<\/a> in their home.<\/p>\n

Marina Walsh, CMB, Vice President of Industry Analysis at MBA, says<\/a>:<\/p>\n

\u201cGiven the nation\u2019s limited housing inventory and the variety of home retention and foreclosure alternatives on the table across various loan types, . . . Borrowers have more choices today to either stay in their homes or sell without resorting to a foreclosure.\u201d<\/strong><\/em><\/p><\/blockquote>\n

3. There Have Been Fewer Foreclosures over the Last Two Years<\/strong><\/h4>\n

One of the seldom-reported benefits of the forbearance program was it gave homeowners facing difficulties an extra two years to get their finances in order and work out a plan with their lender. That helped prevent the foreclosures that normally would have come to the market had the new forbearance program not been available.<\/p>\n

Even as people leave the forbearance program, there are still fewer foreclosures happening today than before the pandemic. That means, while there are more foreclosures<\/a> now compared to last year (when foreclosures were paused), the number is still well below what the housing market has seen in a more typical year, like 2017-2019 (see graph below<\/em>):<\/p>\n

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413,480 Fewer Foreclosures in Last 2 Years<\/p><\/div>\n

4. The Current Market Can Easily Absorb New Listings <\/strong><\/h4>\n

When the foreclosures in 2008 hit the market, they added to the oversupply of houses that were already for sale. It\u2019s exactly the opposite today. The latest Existing Home Sales Report<\/em><\/a> from the National Association of Realtors<\/em> (NAR) reveals:<\/p>\n

\u201cTotal housing inventory at the end of March totaled 950,000 units, up 11.8% from February and down 9.5% from one year ago (1.05 million). Unsold inventory sits at a 2.0-month supply at the present sales pace,<\/strong> up from 1.7 months in February and down from 2.1 months in March 2021.\u201d<\/em><\/p><\/blockquote>\n

A balanced market would have approximately a six-month supply of inventory. At 2.0 months, today\u2019s housing market<\/a> is severely understocked. Even if one million homes enter the market, there still won\u2019t be enough inventory to meet the current demand.<\/p>\n

Bottom Line<\/strong><\/h3>\n

If you see headlines about the increasing number of foreclosures today, remember context is important. While it\u2019s true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years.<\/p>\n

Contact us:<\/strong>
\nPHP Houses
\n142 W Lakeview Ave
\nUnit 1030
\nLake Mary, FL 32746
\nPh:\u00a0(407) 519-0719<\/span>
\nFax:\u00a0(407) 205-1951<\/span>
\nemail:\u00a0info@phphouses.com<\/p>\n

Let\u2019s Connect:<\/strong>
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The information contained, and the opinions expressed, in this article are not intended to be construed as investment advice. The author does not guarantee or warrant the accuracy or completeness of the information or opinions contained herein. Nothing herein should be construed as investment advice. You should always conduct your own research and due diligence and obtain professional advice before making any investment decision. The author will not be liable for any loss or damage caused by your reliance on the information or opinions contained herein.<\/em><\/h5>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Here\u2019s a look at why the number of foreclosures we\u2019re seeing today is nothing like the last time. Finish Reading What You Actually Need To Know About the Number of Foreclosures in Today\u2019s Housing Market<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[4],"tags":[10,231,18,16,91,86,9,42,23,40,63,48,28,54,47,19,6,17],"_links":{"self":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2657"}],"collection":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/comments?post=2657"}],"version-history":[{"count":1,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2657\/revisions"}],"predecessor-version":[{"id":2661,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/posts\/2657\/revisions\/2661"}],"wp:attachment":[{"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/media?parent=2657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/categories?post=2657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/phphouses.com\/blog\/wp-json\/wp\/v2\/tags?post=2657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}