There are many key differences between what’s happening today and the bubble in the early 2000s. One of the reasons this isn’t like the last time is the number of foreclosures in the market is much lower now. Here’s a look at why there won’t be a wave of homes flooding the market.
After the last housing crash, over nine million households lost their homes. This was, in large part, because of more relaxed lending standards. Today, revised lending standards have led to more qualified buyers. As a result, there are fewer homeowners who are behind on their mortgages.
The number of foreclosures is up year-over-year, but it’s still well below what the housing market has seen in a typical year. Foreclosures are still far below the number we saw during the market crash. The big takeaway? Don’t let headlines mislead you.
Many homeowners today have enough equity to sell their homes instead of facing foreclosure. Due to rapidly rising home prices over the last two years, the average homeowner has gained record amounts of equity in their home. And if they’ve stayed in their homes even longer, they may have even more equity than they realize
If you see headlines about the increasing number of foreclosures today, remember context is important. While it’s true the number of foreclosures is higher now than it was last year, foreclosures are still well below pre-pandemic years. If you have questions, let’s connect.
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