If you’ve seen headlines saying foreclosure activity has been climbing for 10 straight months, it’s easy to assume that's a sign of trouble for the housing market. But when you look at the full picture, a few simple truths become clear:
Today’s foreclosure numbers are in line with what’s considered normal
High home equity is keeping most homeowners in a strong financial position
None of the data points to a big wave of distressed sales that’ll crash the market
Foreclosure Filings Are Up 32%, But That Doesn’t Mean the Market’s in Trouble
If you peel the layers all the way back, what everyone is actually worried about is that we’re headed for a repeat of what happened in 2008. Back then, riskier lending practices and an oversupply of homes for sale brought home prices down and led to a significant increase in foreclosures. A lot of people felt the impact. But this isn’t the same situation.
Yes, ATTOM data shows foreclosure filings are up 32% year-over-year. And that increase is going to sound dramatic. But context matters, and it doesn’t mean we’re headed for another crash. And the numbers prove it. Take a look at where we were during the last crash (the red in the graph below). And where we are now (the blue):
Even with the uptick lately, we are still nowhere near crash levels – far from it. This isn’t a return to crisis levels. What it is, is a return to normal.
The graph below (click "Learn More" to finish the article)...
