Foreclosures Are Not Shooting Up

Here’s another misleading foreclosure headline and the truth behind it.

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I made a video a few weeks ago talking about some headlines that did more to terrify than clarify. In there, I mentioned that Realtor.com had done the same thing, and many of you asked about that article, so I’m going over it today.

Their headline reads: “Foreclosures Are Shooting Up—Is It a Repeat of the Early 2000s Housing Crisis?” I get why they did this; they’re trying to get people to stop the scroll and read the article. They are talking about an increase in foreclosures, but they’re not giving the full story.

We had a moratorium on foreclosures for at least a year, so there were zero foreclosures during that time. In August 2019, there were 28,000 foreclosures. That was a normal year, and no talking heads were saying that the market was crashing. In August 2020, we only had 5,603 foreclosures, which is less than 20% of an average year. In August 2021, that went up to 8,348 foreclosures.

 

 

 

When Realtor.com says “shooting up,” they’re talking about how we had a 49% increase from the year before, but that number is still less than a third of what it is normally.

I know that articles like these are confusing, but don’t wait for foreclosures. Nobody thinks that we're going to see a wave of foreclosures. The only places where we’re seeing that are these headlines.

Even if we did see a lot of foreclosures, we are in our third or fourth year of a seller’s market with a drastic shortage of inventory. The bank will sell them at the market rate; they won’t have to discount them.

If you’re planning on buying a home, you need to stay in the market and buy a home as soon as you can. Next year, we expect to see a little more inventory, but prices will continue to appreciate. On top of that, interest rates are supposed to go up to 4%. If you buy now for 3%, you can make that expensive house more affordable.

If you have any questions about this or other real estate topics, feel free to give me a call. Remember, at Warner Realty, we make the complex simple.