So, you know how everything's getting more expensive lately? Like groceries and gas? Well, some folks are worried that with these rising costs, more and more people won't be able to keep up with their mortgage payments. And that's got people thinking that a whole bunch of foreclosures are gonna happen soon. But, hold up! The experts are saying that while there has been a slight increase in foreclosure filings compared to last year, we shouldn't expect a massive wave of foreclosures.

Let me introduce you to Bill McBride, a housing market expert from Calculated Risk. Now, Bill's got quite the track record - he predicted the 2008 crash by closely studying market data and trends. But here's the exciting part - he's got some fresh insights on what we can expect in the current market. So, let's dive into his analysis, shall we?

““There will not be a foreclosure crisis this time.””

— Bill McBride of Calculated Risk.

Let’s look at why another flood is so unlikely.

There Aren’t Many Homeowners Who Are Seriously Behind on Their Mortgage Payments

You know why there were so many foreclosures during the last housing crash? It's because the lending standards were so laid-back. People could easily get mortgages even if they couldn't prove they could pay them back. Back then, lenders didn't really care about credit scores, income, job status, or how much debt someone had. It was a mess.

These days, lending standards have gotten stricter, which means that there are more buyers who are actually qualified to afford their mortgage payments. Good news is that according to data from both Freddie Mac and Fannie Mae, the number of homeowners who are falling behind on their mortgage payments is decreasing. You can check out the graph below for a visual representation of this positive trend.

““May’s overall mortgage delinquency rate matched the all-time low, and serious delinquencies followed suit. Furthermore, the rate of mortgages that were six months or more past due, a measure that ballooned in 2021, has receded to a level last observed in March 2020.””

— Molly Boese, Principal Economist at CoreLogic

Well, before we even start thinking about a bunch of houses going into foreclosure, we need to see more people unable to pay their mortgages. Right now, though, a lot of folks are staying on top of their payments, so it's pretty unlikely that we'll see a big surge in foreclosures anytime soon.

Bottom Line

If you're concerned about a possible surge of foreclosures, let me assure you, the data we have today doesn't indicate that's going to happen. In fact, the good news is that qualified buyers are consistently keeping up with their mortgage payments at a really high rate. So, you can breathe a sigh of relief in that regard.