Regardless where the inventory goes (likely to retreat), the potential home buyers should stay interested, just because of rates staying low. Many of them may be looking forward to when the foreclosures start pouring in.
What’s the latest on the delinquencies/forbearances? From Black Knight:
Total U.S. loan delinquency rate (loans 30 or more days past due, but not in foreclosure): 4.37%
– Month-over-month change: -7.62%
– Year-over-year change: -42.39%
Total U.S. foreclosure pre-sale inventory rate: 0.27%
– Month-over-month change: -1.73%
– Year-over-year change: -24.23%
Total U.S. foreclosure starts: 4,400
– Month-over-month change: 15.79%
– Year-over-year change: -25.42%
Top 5 states by 90-plus days delinquent percentage:
Mississippi: 4.89%
Louisiana: 4.59%
Hawaii: 4.14%
Nevada: 4.14%
Maryland: 4.08%
The takeaway:
The national delinquency rate is at its lowest level since the pandemic hit, even below the pre-Great Recession average.
While there’s been improvement, however, there are still 1.5 million homeowners 90 or more days past due on their mortgages but who are not in foreclosure—nearly four times pre-pandemic levels.
There are 1.5 million homeowners who are 90+ days late but who are not in foreclosure? Do you need any more evidence that lenders aren’t interested in foreclosing? They will give loan mods when they get around to it.
It’s a great time to be a deadbeat!
The analysis below shows the impact on housing prices is likely to be minimal, with 77% of loans in forbearance having a debt repayment plan and with a housing shortage of 5 million single-family homes. However, the foreclosures will likely widen the already alarming homeownership gap among income groups and racial groups, with low income and minority groups twice as likely to face foreclosure than higher income and non-minority groups, and homeowners of FHA-insured loans three times as likely to face foreclosure. A repayment scheme where households pay no more than 5% of income is typically affordable for homeowners.
https://www.nar.realtor/blogs/economists-outlook/the-forbearance-period-is-ending-whats-the-impact-on-foreclosures-house-prices-supply-and
Another thing to look at is how many mortgage loans are actually held by retail banks vs Fannie/Freddie. It’s a whole new game!
Yes, and thank you taxpayers!
Retail banks: not many
Fannie&Freddie: almost all