$\"Why$ \n

When it feels like the cost of just about everything is rising, it\u2019s only natural to wonder what that means for the housing market. Some people are even questioning whether more homeowners will struggle to make their mortgage payments, ultimately leading to a wave of foreclosures. And recent data showing foreclosure filings have increased is only feeding into this fear. But don\u2019t let that scare you.<\/p>\n

If you put the latest data into context, it\u2019s clear there\u2019s no reason to think this is a repeat of the last housing crash.<\/strong><\/p>\n

This Isn\u2019t Like 2008<\/strong><\/h4>\n
While it\u2019s true that foreclosure filings ticked up in the latest quarterly report<\/a> from ATTOM, they\u2019re still lower than the norm \u2013 and way below levels seen during the crash. And it\u2019s a lot easier to see if you graph that out.<\/p>\n
If you compare Q1 2025 (on the right side of the graph<\/em>) to what happened in the years surrounding the 2008 crash (shown in red<\/em>), it\u2019s clear the market is in a completely different place (see graph below<\/em>):<\/p>\n
$\"a$ <\/a>Back then, risky lending practices left homeowners with mortgages they couldn\u2019t afford. That led to a wave of foreclosures, which flooded the market with distressed properties, a surplus of inventory, and caused home prices to drop dramatically.<\/p>\n
Today, lending standards are much stronger, and most homeowners are in a much better financial position. That\u2019s why filings are so much lower this time.<\/strong><\/p>\n
And just in case you\u2019re looking at 2020 and 2021 and thinking we\u2019ve ramped up since then, here\u2019s what you need to know. During those years, there was a moratorium designed to help millions of homeowners avoid foreclosure in challenging times. That\u2019s why the numbers for just a few years ago were so incredibly low.<\/p>\n
So don\u2019t compare today to that low point. If you look at more normal years like 2017-2019, overall foreclosure filings are actually down from what\u2019s typical \u2013 and way down from the volume during the crash.<\/p>\n
Of course, no one wants to go through the process of foreclosure. And the recent increase is emotional because it\u2019s real lives that are impacted \u2013 let\u2019s not discount that. It\u2019s just that, as a whole, this isn\u2019t a signal of trouble in the market.<\/p>\n
Why We Haven\u2019t Seen a Big Surge in Foreclosures<\/strong><\/h4>\nAnd here\u2019s something else to reassure you: homeowner equity. Over the past few years, home prices have risen significantly. That means today\u2019s homeowners have built up a solid financial cushion. As Rob Barber, CEO at ATTOM, explains<\/a>:<\/p>\n
\u201cWhile levels remain below historical averages, the quarterly growth suggests that some homeowners may be starting to feel the pressure of ongoing economic challenges. <\/em>However, strong home equity positions in many markets continue to help buffer against a more significant spike . . .\u201d<\/em><\/strong><\/p><\/blockquote>\n
Basically, if someone falls on hard times and can\u2019t make their mortgage payments, they may be able to sell their home instead of going into foreclosure. That\u2019s a huge contrast to 2008, when many people owed more than their homes were worth and had no choice but to walk away.<\/p>\n
Don\u2019t discount the strong equity footing most homeowners have today. As Rick Sharga Founder and CEO of CJ Patrick Company<\/em>, explains in a recent Forbes <\/em>article:<\/p>\n
\u201c . . . a significant factor contributing to today\u2019s comparatively low levels of foreclosure activity is that homeowners\u2014including those in foreclosure\u2014possess an unprecedented amount of home equity.\u201d<\/em><\/p><\/blockquote>\n
Bottom Line<\/h3>\n
Even with the recent increase, foreclosure numbers are not at the levels seen during the 2008 crash. Plus, most homeowners today are in a much stronger equity position, even with rising costs.<\/p>\n
If you are a homeowner who\u2019s facing hardship, talk to your mortgage provider to explore your options.<\/p>\n<\/div>\n\n<\/body>","protected":false},"excerpt":{"rendered":"
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