If you’ve been watching the news lately, you might have seen stories about more houses being taken away and people having money problems. This might worry you, especially if you want to buy or sell a house.
But the truth is, even though the numbers are going up, the facts show that the housing market is not going to be a big problem.
Foreclosure Activity Rising, but Less Than Headlines Suggest
In the past few years, not many houses were taken away by the bank. This happened because, in 2020 and 2021, there were programs to help many homeowners stay in their homes when things were tough.
After these programs ended, more houses were expected to be taken away by the bank. But just because this number is going up, it doesn’t mean the housing market is in big trouble.
To help you understand how things have changed since the housing problem in 2008, look at the picture below. This information is from ATTOM, a company that gives data about properties. The picture looks at houses with problems going all the way back to 2005. It shows that there are fewer houses with problems now compared to the time of the big housing problem in 2008.
You can see that the number of houses facing problems is going up, getting close to the levels before the pandemic. However, it’s important to know that these numbers are much lower than the time when a lot of houses were in trouble in 2008. Nowadays, many homeowners in America have a lot of value in their homes, and this can help them sell their houses or avoid having the house taken away by the bank.
The Increase in Bankruptcies Isn’t Dramatic Either As you can see in the information below, even though many industries and small businesses faced financial problems during the pandemic, there wasn’t a big jump in bankruptcies. However, the number of bankruptcies has gone up a bit since last year, almost reaching the levels of 2021. But this doesn’t mean there is a big problem to worry about.
The numbers for 2021 and 2022 were less than what we usually see in a typical year. This is mainly because the government gave a lot of money to people and businesses during the pandemic. So, let’s look at the bar for this year and compare it to the one on the far left (2019). This shows that the number of bankruptcies today is still much lower than it was before the pandemic. These two factors are why the housing market is not at risk of crashing.
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