Some believe that the housing market is expected to experience a wave of foreclosures like what happened after the 2008 recession.
There are many reasons people are concerned about the Phoenix housing market. First, there is fear that unemployment is going to rise this time around. Unemployment was relatively low when the housing market collapsed and people lost their homes as a result. Many now think that unemployment will be higher this time around. A lot of worry has also been generated from the possibility of rising interest rates this year which might lead to financial difficulty for those who purchased homes near zero interest rates at the peak of the market.
Experts are saying Foreclosures won’t come from forbearance programs
More than 9 million households suffered foreclosure, short sale, or giving the property back to the bank post-housing crash. We all remember 2008
As of last Friday, the total numbers of mortgages that were still in forbearance only stood at 1.863 million. That’s not as many as 9.3 million that was mentioned before but it's still a sizeable number nonetheless.
The 2021 Real Estate Has Plenty of room for more listings.
Phoenix Homes for sale at the height of the foreclosure crisis in 2008 were abundant as there was a surplus of available homes, reducing prices to their lowest rates ever. Today, there are less than 1 months’ worth of listings available for sale. Experts believe this is plenty of room to absorb any homes that come to market from forbearance or distressed property sales.
Most of the 1.86M homes that are in forbearance have enough equity to sell their home without loss to foreclosure.
Of the 1.86 million homeowners us wide, currently in forbearance, 87% of forbearance homes have at least 10% equity in their homes.
10% equity is important because it enables homeowners to sell their homes and pay the related expenses instead of facing foreclosure or a short sale.
Homeownership is one of the most important and rewarding financial investments that people can make. However, homeownership has become a difficult economic climate due to the rising home values. Rates have made homeownership with prices affordable, but when rates go up, then what?
While this is discouraging, there are ways to protect yourself from these risks by making sure you purchase a home you can afford, and with a fixed interest rate, so when rates go up, your not forced to move.
Home Owners with Government Backed Loans Have Choices!
Last Friday they released a fact sheet and explained that homeowners with government-backed mortgages will be given further options to stay in their homes:
1 Mortgage servicers will allow Burrowers to move any missed payments to the end of their mortgage. There is also no extra cost for this service.
2 Help homeowners with monthly payments by providing them a 25% reduced amount of the monthly principal and interest payment.
Shortage of homes, experts believe it can take a decade to close the underbuilding gap
Underbuilding has increased significantly in the U.S. The underbuilding gap has increased by more than 5.5 million housing units in the last 20 years, mostly in recent years.
Early indicators show that more existing-home inventory is on its way, which could provide opportunities for the housing market to rebound. Home prices are also on their way up, while mortgage rates have been declining. This combination of factors could create a positive environment for the housing market and lead to an uptick in sales volumes.
Early existing home indicators show that Arizona existing-home inventory is on its way.
Good news for a housing market low on supply of homes, real estate experts like Odeta Kushi, Deputy Chief Economist at First American Are discussing slight growth in inventory inching up.
The good news for the housing market is that experts predict slight growth in inventory, which will help a lot of people who are struggling to find affordable housing or are tired of bidding on homes that are out of their price range.
Right now there are more people actively buying than selling, which is why it is still a great time to sell. It's not always the best time, but it's a good time for sellers because of low competition and the super low interest rates.
Bottom Line
Many homeowners are turning to real estate agents to find their dream home. If you're looking for a home right now, it's a great time to purchase because there's still homes available at low rates. This inventory is low and rates are still low, so homeowners should take advantage of the opportunity and sell and upgrade / purchase now!
