If you've been following recent news, you may have seen reports indicating an increase in foreclosures within the current housing market. This might be concerning, particularly if you owned a home during the housing crash in 2008.

The fact is, although on the rise, the data indicates that the real estate market is not heading towards a foreclosure crisis.

Here's the latest data compared to historical trends to provide peace of mind.

The Headlines Make the Increase Sound Dramatic – But It’s Not

The highlighted rise in the media is somewhat misleading as it compares current figures to a period of exceptionally low foreclosures. This skewed comparison may exaggerate the significance of the increase.

Back in 2020 and 2021, a moratorium and forbearance program assisted numerous homeowners in averting foreclosure amid difficult circumstances. As a result, the figures from just a couple of years ago appeared significantly subdued.

Now that the moratorium has concluded, foreclosures are once again increasing. This rise in numbers is anticipated and not alarming. A higher volume of foreclosure filings does not necessarily indicate trouble in the housing market.

To demonstrate this further, let's broaden the comparison. Let's rewind back to the housing crash of 2008, as that's the event people are concerned might reoccur.

Based on data from ATTOM, a property data provider, the graph illustrates that foreclosure activity has remained consistently lower since the 2008 crash.

In 2023, there were approximately 357,000 foreclosure filings, a significant decrease from the peak years surrounding the housing crash when over 1 million filings occurred annually.

A recent article from Bankrate outlines a contributing factor to the differences in the current state compared to the past.

““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.”
”

— Quote Source

Foreclosure activity nowadays differs significantly from the past crash period. This shift is primarily due to the fact that the majority of homeowners currently possess sufficient equity to prevent foreclosure. This scenario is highly beneficial for both homeowners and the overall market.

The data indicates that there is currently no foreclosure crisis in the real estate market, and there are no signs pointing towards one in the future.

Bottom Line

Putting the data into context is crucial at this time. Although there is a predicted increase in foreclosures in the housing market, it is important to note that