Here’s what sensationalist headlines fail to mention about the real estate market…
“Foreclosures Are Out Of Control”
No one would blame you for thinking that foreclosures are flooding the real estate market and people are losing their homes left and right causing the market to be saturated with homes. After all, that is what the news headlines will say. This happens because they are comparing the reported number of 2021 foreclosures to those of 2020. Last year, there was a nationwide moratorium on foreclosures. So, when you compare 2021 to a year when nearly zero foreclosures happen, yes it can seem daunting.
Let’s look back at a normal year now, and compare 2021 to 2019 when foreclosures were actually allowed to happen. Real estate data provider ATTOM shows that Q3 2021 is actually 60% lower than Q3 2020. This is because that same program that prevented foreclosures in 2020 worked. It allowed those who couldn’t make their payments to stay in their houses, making it easier to get back to work in a timely manner and be able to make their payments when the moratorium ended.
“Mortgage Rates Are Going Up, and Demand is Going to Plummet”
Another recent headline has been that mortgage rates are bound to go up, making housing unattainable and the demand for homes will disappear. To calm those fears, we once again look to historical data. The last 3 times that rates increased, home sales showed little to no change. In fact, the last time that home sales had a drastic decrease, rates were actually going down, not up. The exact same trend can be seen for home values. Every time the rates went up, home values rose, not fell.
The bottom line is this, news headlines are meant to get an emotional response so you click their links netting them more advertisement revenue. You need to dig deeper or ask a professional about what is really happening in the real estate market.