Waiting For The Next Real Estate Crash?
According to a recent report from Black Knight, Inc., 6.48 million households entered forbearance due to the pandemic. Since then, 3.72 million have left the program, but only 116,000 exited while they were still behind on their payments – that's only 2%!
Now it's true there are 2.77 million borrowers still in forbearance, but there are three major reasons why we believe there will not be a tsunami of foreclosures like we saw during the housing crash over a decade ago:
Almost 30% of borrowers in forbearance are still current on their mortgage payments.
Banks don't want to repeat the mistakes of 2008-2012 when they put large numbers of foreclosures on their books. Instead, they will likely negotiate modification plans with borrowers which will allow them to maintain ownership of their homes.
With the significant equity homeowners have today, many will be able to sell instead of going into foreclosure.
What this means for you
Will there be more foreclosures entering the market later this year? Yes - especially compared to the record-low numbers in 2020. However, thanks to inventory and buyer demand, there is no reason to believe this will cause home prices to drop.
If you are sitting on the fence hoping for another foreclosure crisis, we encourage you to rethink you strategy. Contact our office today for a free market analysis and learn What Your Home Is Worth today!
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Sources: NEO Home Loans, Ross Zimmerman 1-29-2021 (NeoUtah.com)