Foreclosure Activity Is Still Lower than the Norm

<article class="post-924129 post type-post status-publish format-standard has-post-thumbnail hentry" id="post-924129"><span class="entry-date">January 31, 2024</span><div class="entry-header center-block text-center"><h1 class="entry-title">Foreclosure Activity Is Still Lower than the Norm</h1><div class="shareBlock"><div class="shareTitle">Share</div><div class="shareIcons"><a aria-label="Twitter Share Link" class="twitter solid display-inline-block" data-tracking="Post,Social Post Link Clicked,Twitter" href="http://twitter.com/share?text=Foreclosure+Activity+Is+Still+Lower+than+the+Norm&amp;url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fforeclosure-activity-is-still-lower-than-the-norm%2F" target="_blank"><span class="force-hidden">Twitter</span></a>
<div class="fb-share-button display-inline-block" data-href="https://gilliggroup.com/blog/foreclosure-activity-is-still-lower-than-the-norm/" data-layout="" data-size=""><a class="facebook solid fb-xfbml-parse-ignore" data-tracking="Post,Social Post Link Clicked,Twitter" href="https://www.facebook.com/sharer/sharer.php?u=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fforeclosure-activity-is-still-lower-than-the-norm%2F&amp;src=sdkpreparse" target="_blank"><span class="force-hidden">Facebook</span></a></div>
<a class="pinterest solid display-inline-block" count-layout="horizontal" href="https://pinterest.com/pin/create/link/?url=https%3A%2F%2Fgilliggroup.com%2Fblog%2Fforeclosure-activity-is-still-lower-than-the-norm%2F&amp;description=Foreclosure+Activity+Is+Still+Lower+than+the+Norm" target="_blank"><span class="force-hidden">Pinterest</span></a>
<a class="linkedin solid display-inline-block" href="https://www.linkedin.com/shareArticle?mini=true&amp;url=https://gilliggroup.com/blog/foreclosure-activity-is-still-lower-than-the-norm/?shareSlug%3Dforeclosure-activity-is-still-lower-than-the-norm" target="_blank"><span class="force-hidden">LinkedIn</span></a>
<a class="email dashicons dashicons-email solid display-inline-block" href="mailto:?subject=From gilliggroup.com: Foreclosure Activity Is Still Lower than the Norm&amp;body=Foreclosure Activity Is Still Lower than the Norm%0D%0Dhttps://gilliggroup.com/blog/foreclosure-activity-is-still-lower-than-the-norm/" target="_blank"><span class="force-hidden">Email</span></a>
</div></div><div class="post-tax post-category"><span></span><a href="../category/realtor-blog/index.html" rel="tag">Realtor Blog</a></div><div class="post-tax post-post_tag"></div></div><div class="entry-content"><div><img alt="Foreclosure Activity Is Still Lower than the Norm Simplifying The Market" decoding="async" loading="lazy" src="https://media.agentaprd.com/sites/222/20240131-Foreclosure-Activity-Is-Still-Lower-than-the-Norm.webp" style="display: block; margin-bottom: 5px; clear: both; max-width: 100%;" width="358"/>
<p>Have you seen headlines talking about the increase in foreclosures in today’s <a href="https://www.simplifyingthemarket.com/2023/12/19/expert-quotes-on-the-2024-housing-market-forecast/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">housing market</a>? If so, they may leave you feeling a bit uneasy about <a href="https://www.simplifyingthemarket.com/2024/01/12/home-prices-forecast-to-climb-over-the-next-5-years-infographic/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">what’s ahead</a>. But remember, these clickbait titles don’t always give you the full story.</p>
<p>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.</p>
<h4><strong>Putting the Headlines into Perspective</strong></h4>
<p>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.</p>
<p>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.</p>
<p>When the moratorium came to an end, there was an expected rise in foreclosures. But just because foreclosures are up doesn’t mean the <a href="https://www.simplifyingthemarket.com/2023/11/29/why-the-economy-wont-tank-the-housing-market/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">housing market</a> is in trouble.</p>
<h4><strong>Historical Data Shows There Isn’t a Wave of Foreclosures</strong></h4>
<p>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.</p>
<p>Take a look at the graph below. It uses foreclosure <a href="https://www.attomdata.com/news/market-trends/foreclosures/attom-2023-year-end-u-s-foreclosure-market-report/" rel="noopener noreferrer" target="_blank">data</a> from <em>ATTOM</em>, a property data provider, to show foreclosure activity has been consistently lower (<em>shown in orange)</em> since the crash in 2008 (<em>shown in red</em>):</p>
<p><a href="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240130/20240131-us-forclosure-activity-increases-from-2022-but-still-below-pre-pandemic-levels.png" rel="noopener noreferrer" target="_blank"><img decoding="async" src="https://files.keepingcurrentmatters.com/KeepingCurrentMatters/content/images/20240130/20240131-us-forclosure-activity-increases-from-2022-but-still-below-pre-pandemic-levels.png"/></a></p>
<p></p>
<p><strong>So, while foreclosure filings are up in the latest report, it’s clear this is nothing like it was back then.</strong></p>
<p>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 <em>CJ Patrick Company</em>, <a href="https://www.forbes.com/advisor/mortgages/real-estate/housing-market-predictions/" rel="noopener noreferrer" target="_blank">explains</a>:</p>
<blockquote><p><em>“</em><strong><em>Foreclosure activity is still only at about 60% of pre-pandemic levels</em></strong><em>. . .”</em></p></blockquote>
<p>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 <a href="https://www.simplifyingthemarket.com/2024/01/09/ways-your-home-equity-can-help-you-reach-your-goals/?a=712984-fa409495d5d70154d03a25e81e9540e2" rel="noopener noreferrer" target="_blank">enough equity</a> to keep them from going into foreclosure. As Molly Boesel, Principal Economist at<em> CoreLogic, </em><a href="https://www.corelogic.com/intelligence/loan-performance-insights-january-2024/" rel="noopener noreferrer" target="_blank">says</a>:</p>
<blockquote><p><em>“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… </em><strong><em>borrowers in later stages of delinquencies are finding alternatives to defaulting on their home loans.”</em></strong></p></blockquote>
<p><strong>The reality is, while increasing, the data shows a foreclosure crisis is not where the market is today, or where it’s headed.</strong></p>
<h3>Bottom Line</h3>
<p><span style="color: black;">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, connect with a real estate agent.</span></p>
</div>
</div></article>