Are Foreclosures Headed Our Way? Here’s What the Data Really Shows

You may have noticed headlines about foreclosures ticking up. If that has you worried about another housing crash, here’s what you need to know.

According to ATTOM, during the housing crisis (2007–2011), more than nine million people went through some type of distressed sale. Compare that to just over 300,000 last year, and you can see the difference. Even though there’s been a recent increase, today’s numbers are still nowhere close to those levels.

So, are we on the verge of another wave? The short answer: no.

Why Mortgage Delinquencies Matter

Industry experts watch mortgage delinquencies (loans over 30 days past due) as an early warning sign for future foreclosures. The most recent data shows that delinquency rates are holding steady compared to last year. That’s an encouraging signal that the overall housing market remains stable.

Still, there are trends worth watching. Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association, points out:

“While overall mortgage delinquencies are relatively flat compared to last year, the composition has changed.”

Right now, FHA loans represent the largest share of new delinquencies. Borrowers with FHA mortgages are often more impacted by economic changes, like inflation or employment shifts, so this isn’t surprising. But it doesn’t mean the housing market as a whole is headed for trouble.

If you compare today’s numbers to 2008, you’ll see the difference. Back then, all loan types had much higher delinquency rates. Today, outside of FHA loans, delinquency levels remain low and steady.

ResiClub explains it this way:

“The recent uptick in mortgage delinquency seems to be concentrated among FHA borrowers, however, mortgage performance remains very solid when viewed in light of the twenty-year history of our data.”

What About FHA Loans in the South?

FHA loans make up only about 12% of all home loans in the U.S., but they’re more common in certain areas, especially in the South.

As the Federal Reserve Bank of New York explains:

“Looking at geographic concentrations of loans, recent data indicate that a higher proportion of mortgage balances are delinquent in many of the southern states . . . we see that higher delinquency rates coincide with a higher share of FHA loans across states.”

Even so, delinquency rates today are still far below what we saw in 2008. This isn’t the start of another foreclosure crisis it’s simply a trend industry experts are keeping an eye on.

If You’re Struggling with Payments

No homeowner wants to face foreclosure. If you’re having trouble, reach out to your lender right away to explore repayment plans or loan modification options.

And remember many homeowners today have built up significant equity. That means selling your home could be a way to avoid foreclosure altogether.

Bottom Line

While foreclosures have ticked up slightly, the foreclosures data shows the market is still healthy and nowhere near a crash like 2008.

If you want to stay informed or explore your options, I’m here to help. Call me, Teresa Hill, for trusted guidance with all of your real estate needs.

*Information and Graphic sourced from ATTOM, Mortgage Bankers Association, ResiClub, Zillow, Realtor.com, & Keeping Current Matters