NEWS: Foreclosures Are On The Rise

Newly released data real estate shows in January of this year there was a seven-fold increase in foreclosures, according to Market Watch. "What’s more, data from real estate data analytics firm ATTOM Data Solutions revealed that lenders repossessed 2,634 U.S. properties through completed foreclosures in February 2022, which is an increase of 70% from last year (though it’s still down 45% from last month)." 

Realtor.com senior economist George Ratiu says, "the uptick in foreclosures during January is an early signal that many of the regulatory protections implemented during the pandemic to help Americans stay in their homes are starting to wear off."

While the increases in foreclosures are dramatic, they are coming off extreme lows that were created by the forbearance programs that were put in place. Those people who continued their forbearances period into this year are most likely the ones that may be suffering permanent financial hardships during this time.  

“When their forbearances end, they’re less likely to be able to resume their payments and more likely to end up in foreclosure,” said Holden Lewis (home and mortgage expert at NerdWallet).

Cleveland had the nation’s highest foreclosure rate among cities last month with one in every 1,483 housing units affected. While the numbers are escalating quickly and likely to get much higher than that, economics say the foreclosure increase is not a sign of economic turmoil or weakness in the housing market. (pheww we can breathe again!)

“Unlike the Great Recession where home prices dropped approximately 20% from peak to trough, this recession saw home values rise by roughly the same amount. So while we should see some foreclosures, the likelihood is that there will be far fewer from a percentage basis due to the ability to sell a home versus default, or stay in the home due to far better workout options and higher re-employment.” - CNBC News

Keep coming back for more updates as our team continues to track the data and analytics on this topic and let's hope to see a decline soon.