The housing market has been strong throughout 2021, and predictions for the rest of the year are anything but dismal. If anything, we’re eventually headed for a rise in available inventory, lower prices, and fewer buyers who will drive up competition.
Even though things seem as though they’ll level out as we head into 2022, it’s still wise to stay on top of what the market is doing. This way, you can position yourself to be in the best possible situation in the future.
In this blog, we’re spreading optimism with four key ways the housing market is poised for continued strength.
Keep reading for valuable information to help you stay ahead of the curve.
1. Nearly half of those in forbearance are caught up
According to the Mortgage Bankers Association (MBA), findings through March 28 demonstrates that 48.9% of homeowners who used the extension program have gotten current on their mortgage payments.
To say that this is encouraging news would be an understatement. Figures like these show that an economic recovery may be underway. Moreover, the housing market has been largely insulated from the many downturns associated with the pandemic.
Check out these stats to see just how many homeowners are rebuilding their financial circumstances for the better:
- 26.6% made their monthly payments during their forbearance period14.7% brought past due payments current
- 7.6% paid off their loan in full
This doesn’t mean that the over two million still in the plan will exit the same way. Any housing market predictions 2021 has down the road will need to be verified as the year moves forward.
It does, however, give us some insight into the possibilities.
The oncoming dread of a mass wave of foreclosures may not be as intense as many once thought. A key indicator to watch will be news relating to available inventory. High levels of home foreclosures can sometimes open inventory for eager buyers.
The final extension for forbearance has moved been moved to September. We’ll be watching the rest of the year closely and will update you with any important news as it becomes available.
2. Banks Aren’t Looking to Scoop Up Properties
Banks have learned big lessons from the crash of 2008. Lending institutions don’t want the headaches of managing foreclosed properties, so this time, they’re working with homeowners to help them stay in their homes.
One of the biggest housing market predictions 2021 has provided is the reluctance many banks have to repossess properties. For example, about 50 percent of all mortgages are backed by the Federal Housing Finance Agency (FHFA).
In 2008, the FHFA offered 208,000 homeowners some form of action to keep their homes. Home retention options include temporary forbearances, repayment plans, loan modifications, or partial loan deferrals. Over the past year, the FHFA has offered that same protection to over one million homeowners.
Today, almost all lending institutions are working with their borrowers. The report from the MBA reveals that of those homeowners who have left forbearance,
- 35.5% have worked out a repayment plan with their lender
- 26.5% were granted a loan deferral where a borrower does not have to pay the lender interest or principal on their home loan for an agreed-to period of time
- 9% were given a loan modification
3. Mass foreclosures are no longer politically popular
The government also seems determined not to let individuals or families lose their homes.
The CFPB is proposing a new set of guidelines to ensure people will retain their homes. Here are the major points in the proposal:
- The proposed rule would provide a special pre-foreclosure review period that would generally prohibit servicers from starting foreclosure on January 1, 2022.
- The proposed rule would permit servicers to offer certain streamlined loan modification options to borrowers with COVID-19-related hardships based on the evaluation of a complete application.
- The proposed rule wants temporary changes to certain required servicer communications to make sure borrowers receive key information about their options at the appropriate time.
A final decision is yet to be made, and some in the real estate industry wonder if the CFPB has the power to delay foreclosures at the scale that’s potentially needed.
As always, we’ll keep you informed as new developments unfold.
4. Homeowners can sell before they are foreclosed on
This could drastically reduce the number of damaging economic headlines coming out of the real estate sector.
Remember, homeowners have record levels of equity today. A large part of that is due to high housing prices.
Just like the banks, homeowners learned a lesson from the housing crash. Many are willing to partner with a talented agent who can help them sell quickly.
We’re here no matter what the market does!
There has been a lot of talk about what will happen once the 2.3 million households currently in forbearance no longer have the protection of government extensions.
If you’re experiencing the ups & downs of a tricky market, we suggest that you stay in close contact with us. We’ve helped countless homeowners avoid foreclosure, not to mention sell their properties at top dollar.
Whatever housing market predictions 2021 has in store, know that you have an exceptional team of professionals ready to tackle your real estate challenges.
Contact us to go over your options. We’ll empower you with expert service that puts you first.