We May Not See a Ton of Foreclosures Soon
Despite having a banner year of housing market activity, the real estate industry could be in for a dose of reality once 2022 rolls in. However, many industry insiders believe the housing market won't experience a wave of foreclosures similar to what happened when the housing bubble burst 15 years ago.
After the last housing crisis, more than 9.3 million people lost their homes due to short sales, foreclosure etc. Once those stay-at-home orders came down in early 2020, experts feared the pandemic would have a similar impact on the housing market.
Some even predicted that almost one-third of all homes would enter foreclosure, but in reality, that number reached 8.5% at its peak. As of November 2021, that number dropped to 2.2%.
Over the last two years, home prices have skyrocketed so those in forbearance likely have at least 10% equity in their home. This is important because it gives homeowners a chance to sell their homes and pay related expenses instead of having their credit suffer due to a foreclosure or short sale.
Also, when those foreclosures hit the market back in 2008, they hit an already saturated market. The market had a nine-month supply of listings. Today's market only has a three-month supply.
Today's market is following its own path and aims to steer clear of the housing crash of 2008. With forbearance set to expire soon, it might be a smart time to find a new home. If you're interested in getting into a new residence, reach out to a credible real estate professional.
Sources: Rismedia.com, Keepingcurrentmatters.com