Published by REALTOR.com | October 12, 2023
Is this a repeat of the 2008 housing bust?
The number of homeowners hit with foreclosure notices in the third quarter of the year jumped 34% from a year ago to nearly 125,000, according to a recent report from real estate data firm ATTOM. They were up 28% from the previous quarter.
Across the country, about 1 in every 1,121 properties had a foreclosure filing in the third quarter. That’s a return to almost pre-pandemic levels as foreclosure moratoriums put in place in the early days of COVID-19 have expired.
Filings included default notices, scheduled auctions, and bank repossessions.
“Foreclosures are on the rise again,” ATTOM CEO Rob Barber said in a statement. “It’s evident that some homeowners are still grappling with the pandemic’s financial aftermath or encountering new challenges.”
About 11,000 homes were repossessed in the third quarter, representing a 5% jump from a year ago.
While rising foreclosures and still-high home prices might give folks some unwelcome flashbacks to the run-up to the housing bubble that burst around 2008, real estate experts don’t believe another foreclosure crisis is looming.
In the aftermath of the Great Recession, the most dangerous mortgages with payments that ballooned sharply over time have largely been eradicated from the market. These were the loans that got many homeowners in trouble when they could no longer afford their monthly housing bills.
In addition, mortgage lenders have tightened their qualification standards to ensure only the strongest borrowers receive loans.
Finally, in a reversal from the Great Recession, there are now more buyers than there are homes for sale. This should keep home prices strong, helping to prevent another crash.
