This is what happens when you lose equity due to rising rates and inflation sadly. So many of you saying this wouldn't happen because people had equity and there is a housing shortage.

quote:
Across the U.S., only 3.71% of adults living in owner-occupied housing units aren’t caught up on their mortgage payments. The share of people in owner-occupied households caught up on their payments is 60.43%, while an additional 35.47% don’t need to make payments because they own their homes free and clear.

Of those not caught up on their mortgages, 19.62% across the U.S. report being either somewhat or very likely to leave their home due to foreclosure in the next two months. Though a noteworthy portion of adults who live in households behind on mortgage payments fear being foreclosed on in the near future, it’s important to reiterate that only 3.71% of households nationwide aren’t current on their housing payments.

LINK

There are roughly 140 million homes in the USA so I am not sure why the article downplays the 3.71% number. It is significant. The peak of the 2008 crash was in 2010 when 1.05 million homes were foreclosed on so by comparison a million people walking away within the next two months would be detrimental to the market.

Couple that with the fact that there are an additional 345K houses still in forbearance from Covid closures and they don't seem to be able to get out of forbearance could make 2023 scary for the RE market

quote:
The Mortgage Bankers Association (MBA) has reported that the total number of loans now in forbearance as of September 30, 2022 fell by three basis points from 0.72% of servicers’ portfolio volume in the prior month to 0.69%. The MBA estimates there are currently 345,000 U.S. homeowners in forbearance plans.

In the MBA’s latest Loan Monitoring Survey, the share of Fannie Mae and Freddie Mac loans in forbearance decreased two basis points from 0.32% to 0.30%, while Ginnie Mae loans in forbearance increased one basis point from 1.32% to 1.33%. The forbearance share of portfolio loans and private-label securities (PLS) declined 12 basis points from 1.26% to 1.14%.

“The overall number of loans in forbearance dropped in September, but the pace of forbearance exits slowed to a new survey low and new forbearance requests continued to come in. This dynamic in turn prevented any substantial improvement in the forbearance rate,” said Marina Walsh, CMB, MBA’s VP of Industry Analysis. “The COVID-19 federal health emergency is still in effect and in most cases, borrowers can still seek initial COVID-19 hardship forbearance.”

Pace of Forbearance Exits Slows in September

quote:
ATTOM has released its Q3 2022 U.S. Foreclosure Market Report, which shows there were a total of 92,634 U.S. properties with foreclosure filings—defined as default notices, scheduled auctions or bank repossessions—up 3% from Q2 and 104% year-over-year. There were a total of 31,836 U.S. properties with foreclosure filings in September 2022, down 8% from August 2022, but up 62% from September 2021.

Q3 Foreclosure Rates ‘Reflecting Other Aspects of the Economy’

Year over year is a joke since we shut down for two years. Month-to-month or quarter-to-quarter is the data that we need to be looking at and it is going the wrong way after declining for over a decade.

This post was edited on 10/20/22 at 8:45 am