Will There Be a Wave of Foreclosures Hitting the Market in 2023?

The shift in the housing market this year has many asking: “will there be a wave of foreclosures hitting the market?”

Although you might see headlines that report rising numbers of foreclosures, consider the context! During the pandemic, there was a nationwide foreclosure moratorium. Once that was lifted last year there was an uptick in foreclosure activity. Now, data from the New York Fed shows there are fewer foreclosures happening today than before the pandemic.
During the last housing market crash, between 2006 and 2014, about 9.3 million households went through foreclosure, gave up their home to a lender or sold in a distressed sale. This was, in part, due to relaxed lending standards (aka: people bought homes they could not actually afford).

Today, new lending standards have led to more qualified buyers and fewer homeowners are behind on their mortgages. Homeowners today have enough equity to sell their homes instead of resorting to foreclosure. Because home prices have been increasing since 2020, many homeowners have more equity than they even realize.

So, don’t let the headlines scare you! If you have any questions about anything you’ve read, my inbox is always open!