Major Economists do not see a big wave of foreclosures
Millions of homeowners have been sheltered from foreclosures since the start of the COVID-19 pandemic. But with mortgage forbearance programs and foreclosure moratoriums winding down, is there going to be a surge in home foreclosures? While some investors are hoping to see a rise in problem properties, top real estate market economists don't anticipate a huge number of forced home sales by lenders. "We don't think we are going to see a tsunami of foreclosures occurring," said Dr. James Gaines, the longtime economist with the Texas Real Estate Research Center at Texas A&M University. "I don't think we will start seeing anything until the first half of next year. "It's a relatively small number of homes still getting mortgage forbearance.
At the end of August, only about 3% U.S. home loans were in forbearance plans, according to the latest estimate from the Mortgage Bankers Association of America. That adds up to about 1.6 million homeowners. The share of home mortgages in payment forbearance is less than half what it was a year ago. Home foreclosures have been almost nonexistent in the last year, with most lenders holding back from forcing property sales. Any rise in home foreclosures won't compare with previous down cycles, Gaines said. "There will be nothing on the scale we saw back in 2008 and 2009," he said. "We don't see it happening — particularly in Texas." Because of big increases in home values in D-FW and other Texas markets in the last few years, most homeowners have large amounts of equity in their houses.
Dallas Morning News, September 10, 2021