Hey there! If you've been keeping up with the news lately, you've probably come across some articles talking about a rise in foreclosures and bankruptcies. It's understandable if that's got you feeling a bit worried, especially if you're considering buying or selling a house.

You know what? Despite the numbers rising, the data actually shows that the housing market is not headed for a crisis.

Foreclosure Activity Rising, but Less Than Headlines Suggest

Over the past few years, we've seen a significant drop in foreclosures. And you know why? Well, in 2020 and 2021, some awesome programs like the forbearance program and other relief options were introduced. These initiatives were a game-changer because they helped countless homeowners hang on to their homes during those tough times. Pretty cool, right?

When that moratorium finally ended, everyone was anticipating a surge in foreclosures. However, it's important to understand that even though the numbers have gone up, it doesn't automatically mean there's trouble brewing in the housing market.

Check this out - the number of foreclosure filings is slowly creeping back up to the levels we saw before the pandemic hit. But you know what? It's still nowhere near as bad as it was during the housing market crash back in 2008. The good news is that homeowners in America now have a ton of equity in their homes, which can be a huge help in selling their homes and avoiding foreclosure. How awesome is that?

The Increase in Bankruptcies Isn’t Dramatic Either

Could you take a look at the info below? Despite the financial struggles that many industries and small businesses went through during the pandemic, bankruptcies haven't shot up dramatically. However, there has been a bit of an increase in bankruptcies compared to last year, almost reaching 2021. But don't worry, it's not really something to be alarmed about.

The numbers for 2021 and 2022 were a bit lower compared to what we usually see in a normal year. And you know why? It's because the government stepped in and helped out with trillions of dollars in aid for people and businesses during the pandemic. Now, instead of dwelling on those years, let's shift our focus to this year and compare it to how things were back in 2019. The data shows that the number of bankruptcies happening right now is still way lower than pre-pandemic levels. And guess what? These two factors are a big reason why we don't need to worry about the housing market crashing. It's all looking pretty stable, my friend.

Bottom Line

It's essential to get a good grasp of the data at the moment. We've been seeing an increase in foreclosures and bankruptcies, but don't worry, these early signs aren't pointing toward a potential crash like before.