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With the cost of living rising, it’s natural to wonder how these higher expenses might impact the housing market. Many are worried that increased prices and tighter budgets could lead more homeowners to fall behind on mortgage payments, sparking a wave of foreclosures. But before jumping to conclusions, let’s look at what’s really happening.
The good news? The latest data shows no sign of a foreclosure wave.
How Today’s Market Differs from 2008
To ease any concerns, it’s essential to understand how today’s market is fundamentally different from the 2008 housing crash. Recent data from ATTOM, a leading property data provider, shows that foreclosure filings remain low, especially when compared to the peak levels during the 2008 crisis. Back then, a significant number of foreclosures flooded the market, impacting prices. In contrast, today’s foreclosure numbers are notably lower and have even declined slightly in recent reports.
So why are foreclosure numbers higher now than in 2020 or 2021? The explanation lies in the mortgage moratoriums of those years, which helped millions of homeowners navigate financial challenges. As a result, foreclosure filings during that period were exceptionally low. Looking back at a broader timeline, however, foreclosure filings are significantly down overall.
Why Foreclosures Remain Low Despite Rising Costs
Despite the higher cost of living, foreclosure rates remain stable, largely due to one key factor: homeowner equity. Homeowners today have much more equity built up in their homes than in 2008. According to a recent Bankrate article:
“In the years after the housing crash, millions of foreclosures flooded the housing market, depressing prices. That’s not the case now. Most homeowners have a comfortable equity cushion in their homes.”
This equity serves as a financial safety net, allowing homeowners facing financial difficulties to potentially sell their homes rather than going into foreclosure. During the 2008 crash, many homeowners owed more than their homes were worth, leaving them with few options. Today’s market provides homeowners with more flexibility and protection.
Looking Ahead at the Housing Market
It’s true that today’s higher costs are a challenge, but they don’t necessarily signal a surge in foreclosures. The equity cushion many homeowners have built up over the years continues to keep foreclosure filings low and provides more options for those facing financial strain.
While everyday costs have increased, the housing market remains resilient. Current data shows no impending foreclosure crisis, with today’s homeowners in a much stronger financial position than in 2008. Thanks to increased equity and a robust housing market, homeowners have more options and security than ever. If you’re ready to start your homebuying journey or see what your equity can do for you, get in touch with your local Evergreen lender today for a free consultation!
At Evergreen Home Loans, we’re committed to helping you navigate today’s market confidently, ensuring you have the support needed to achieve your homeownership goals.
