If you’ve seen recent headlines about foreclosures skyrocketing across the country, you might think the housing market is heading toward another crash. But as with most clickbait headlines, the reality is far less dramatic.
The data does show an increase in foreclosure activity — but from historically record-low levels. During the COVID-19 moratorium, foreclosures dropped to nearly zero. As the moratorium ended, some homeowners inevitably fell behind and entered foreclosure. That small wave caused the percentage increases to look huge, even though the total number of cases remains very low.
Here’s the bigger picture:
Foreclosure starts and completions are both still well below pre-COVID averages. Many homeowners who begin the foreclosure process are able to recover and keep their homes. The current market doesn’t show signs of a widespread housing crash — not even close.
So while affordability remains a challenge and foreclosure numbers are ticking up slightly, there’s no evidence of a looming flood of distressed properties. For buyers waiting for a wave of foreclosures to hit the market — that’s not a good strategy (at least not yet).
If you’re looking for expert guidance on the real estate and mortgage trends shaping Southern California and Washington, reach out to my team at Franklin Loan Center. Let’s separate the headlines from the facts so you can make confident decisions.