Weekly Special | October 25, 2021

It’s Not 2008 For Foreclosures

The Federal Government placed a moratorium on Foreclosures during the beginning stages of the COVID pandemic that (kind of) came to an end at the end of September. I say “kind of” because there are many lenders that extended their own version of the moratorium through the end of the year.

On top of that, there were millions of homeowners who took a voluntary forbearance period where they were allowed to stop making mortgage payments and agreed to have the accumulated interest pushed to the end of the loan period.

So in a nutshell, there are several million loans in the US that fall into one of these two categories, and many have said when these homes hit the market, we’re going to see a repeat of the housing bubble. Of course, they made/make these claims without an understanding of the overall market.

Equity In The Housing Market What these incorrect reports fail to grasp is that home values are rising due to low supply, so most of these homes have appreciated 20% or more since the beginning of the pandemic. In 2008, the market was oversupplied with homes and values were falling. The millions of foreclosures that entered the market after 2008 only added to the glut of supply and furthered depreciating values.

When you combine low supply with high equity and even moderate demand, you have all the ingredients you need to see home values continue higher, regardless of the foreclosures that will arrive.

The original one-page Weekly Special PDF is still available.