Foreclosure Crisis on the Horizon?
The proportion of homeowners postponing mortgage payments had been falling steadily from June to November, but the decrease has largely flattened since November. (Wall Street Journal)
For roughly the past two months, that group of homeowners has flatlined at about 5.5%, according to the Mortgage Bankers Association. Though that is down from a peak of 8.55% in June, some economists are concerned about the stalling forbearance rate—and worry that it could even start climbing as the economy sheds jobs.
This data might not be as bad as it looks. The plateauing of missed mortgage payments coincides with the spiking of COVID cases. So many are hopeful that as more receive the vaccine, the economy will recover, and people will start making mortgage payments again.
However, even if there is a massive foreclosure crisis the housing market is so strong and inventory is so low it might not be as devastating as some think. Redfin agent Gina Sapnar, said in a statement back in December (Redfin),
“There are investors just waiting to buy distressed properties,” continued Sapnar. “I have one investor constantly reaching out, they are even looking for off-market homes because once a distressed home hits the market it gets multiple offers.”
Nobody wants to see anyone get foreclosed on, especially en masse, so lets hope for an economic rebound. However, even if do a foreclosure wave the markets could forstand it.