You may be thinking it’s finally your moment to jump into the market. To make sure you’re ready, you need to get pre-approved for a mortgage.That’s when a lender looks at your
Foreclosures are a Trickle, not a Tsunami
Dated: November 30 2022
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With the rapid shift in the housing market this year, some folks are concerned that we're destined for a repeat of the crash of 2008. However, there are many key differences between what's happening today & the bubble in the early 2000s. One of those key differences is that the number of foreclosures in the market is much lower now. Here's why it's highly unlikely there will be a wave of foreclosures flooding the market:
Not as Many Homeowners Are in Trouble This Time
After the last housing crash, millions of households lost their homes due to a foreclosure, a short sale, or because they gave it back to the bank. This was partly because of the relaxed lending standards where people were taking out mortgages they couldn't afford. Those lending practices led to a wave of distressed properties which made their way into the market and caused home values to plummet.
But today, revised lending standards have led to more qualified buyers. As a result, there are fewer homeowners who are behind on their mortgages.
There Have Been Fewer Foreclosures over the Last Two Years
During the initial covid event, many homeowners were able to pause their mortgage payments using the forbearance program. This program gave homeowners facing difficulties extra time to get their finances in order and, in many cases, work out a plan with their lender. There are still fewer foreclosures happening today than before the 2020 covid event.
Most Have More Than Enough Equity To Sell Their Homes
Many homeowners today have enough equity to sell their homes rather than face foreclosure. Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home.
Bottom Line
If you see headlines about the increasing number of foreclosures today, remember context is important. While it's true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years. If you have questions about your options as a potential seller, let's connect.
Mary Griesbach
I love living in western Wisconsin! We have good schools, strong businesses and endless outdoor recreational opportunities. My goal is to get to know you and your goals, and to provide you with enough....
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