Seeing Foreclosure Headlines? Why This is Not Like the Crisis from 2008

If you are an Omaha homeowner, buyer, or seller you may be concerned with recent news headlines stating that the number of foreclosures is rising significantly. This may leave you with concerns about buying or selling a home or about how your home will retain its value in Omaha. Understanding what is truly going on in the real estate market as far as foreclosures are concerned can be helpful but it is good to make sure you know the real facts.

ATTOM a company that provides property data put out a recent report stating that foreclosure filings are up 6% as compared to the quarter before and are up 22% as compared to the year prior. Just looking at this alone you may incorrectly assume that there is a foreclosure problem on the horizon. This is what many media outlets have done and it could cause some Omaha buyers to think twice about making a home purchase. While there is an increase in foreclosures, looking at more data will show that a crisis is not on the horizon.

The recent rise in foreclosures is not the dramatic concern that the news is selling

In the not-so-distant past recent foreclosure numbers hit record lows. In 2020 and 2021 the forbearance program that was available through the pandemic helped millions of homeowners stay in their homes along with many other relief options offered. This allowed homeowners that were struggling during a very difficult time of companies shutting down to get back up on their feet and continue to hold onto their homes.

This happened all while home values were drastically increasing which helped homeowners that could have been in a foreclosure situation to leverage their financial struggles with the equity in their home and sell the property instead of going to foreclosure. The equity growth of many properties will continue to be a helpful factor to keep homeowners from foreclosure.

The ending moratorium put in place by the United States Government had to come to an end at some time and when it did this, of course,  increased the number of foreclosures. Yes foreclosure numbers are up that is a fact but they are not spelling out the trouble that they did in the huge housing crisis of 2008. Many of the foreclosure proceedings that would have happened during the moratorium were held off because of it and this is a significant reason for the increase of foreclosure numbers right now.

Comparing foreclosure numbers right now to the past

A further look into the past in an actual side-by-side comparison of the numbers from the former housing crisis can give even further insight into why a rise in foreclosure numbers is not necessarily a huge concern just yet.

Foreclosure numbers hit a high in the first quarter of 2009 reaching the 900,000 mark. The number of foreclosures took a slight dip but then went back up and stayed at or above 900,000 until 2011. Moving all the way forward to the second quarter of 2020 the number of foreclosures hit an all-time historic low under 100,000. The numbers have stayed this way for quite a long time and have not had an increase until just recently where they are now right at the 100,000 mark. The current foreclosure numbers are at a low fraction of what they were during the housing crisis.

Another factor of the current foreclosure increases not being the crisis that has been painted by some news articles is that since the housing crisis of 2008 lenders are required to have much stricter qualifying measures before lending money out to mortgage applicants. More homeowners paying mortgages are on much more solid financial ground as compared to the unethical lending practices that were happening before.

The best way to really know what is going on in the real estate market in Omaha and especially in the neighborhood and community where you live is to talk with a local real estate agent. The local agent can help you to see the actual numbers in your area and determine what your homeownership plans should be.

For more information on real estate in Omaha Nebraska and surrounding areas please contact us any time.