04/13/2021
I’ve had many people ask me if more foreclosures will hit the market once the forbearance period ends. The likelihood of a lot of foreclosures is pretty slim. We are not in real estate bubble like we were in 2006, where owners had 0% down payment loans and zero equity in their homes when the recession hit. Instead, our market is healthy - we just have a perfect example of limited supply and great demand (this demand is, in part, due to low mortgage rates). This limited supply and great demand has created significant price increases. Foreclosures are highly unlikely as the majority of sellers have equity in their homes due to tighter lending restrictions and increased value so they are able to sell, if necessary, without being under water. A shift towards a more stable market will likely happen once more new construction homes, that have been slow to rise since the early 2000 recession, are completed. Check out these other reasons too about why foreclosures are unlikely.
There has been a lot of discussion as to what will happen once the 2.3 million households currently in forbearance no longer have the protection of the program.
