Headlines about surging foreclosures can make you think twice about buying a home. If more homeowners are facing foreclosure, does that mean home prices are about to crash?
The original article’s answer was that the data did not point toward a foreclosure crisis. Its central lesson remains useful: a dramatic percentage does not tell the whole story. You need to understand where the increase started, what caused it and how the total compares with earlier levels.
The figures and expert assessments below belong to the historical report discussed in the original article. They provide context, not a live market update or a guarantee about future home prices.
Start With Both Sides of the Comparison
The ATTOM U.S. Foreclosure Market Report cited in the original article showed foreclosure filings rising 115% compared with the preceding year. That is more than double, and it is easy to understand why that figure attracted attention.
But the same report also showed filings 34% below the pre-pandemic comparison level. Leaving out that second number changes how the first one sounds.
Both figures describe the same market. Foreclosure filings increased sharply from one comparison point while remaining substantially below another.
That is the first question to ask when you see a foreclosure headline: Up compared with what? An increase from an unusually low starting point needs a different explanation than an increase beyond already elevated levels.
Why the Starting Point Was So Low
During the pandemic, forbearance programs and other homeowner relief options helped bring foreclosure filings down to record-low levels. Those unusually low totals became the baseline for the increase that followed.
That matters because the reported jump was not a comparison between two ordinary periods. It followed a stretch when relief programs had helped keep foreclosure activity exceptionally low.
The increase was real. So was the unusually low starting point. A useful explanation needs to include both rather than treating the percentage increase as the entire story.
What ATTOM’s Assessment Added
Rick Sharga, identified in the original article as ATTOM’s executive vice president of market intelligence, provided additional context. His assessment came 18 months after the government’s foreclosure moratorium ended.
At that point, fewer than 5% of the 8.4 million borrowers who had entered the CARES Act forbearance program remained in it. Sharga noted that foreclosure activity was still significantly lower than before the COVID-19 pandemic.
He credited government and mortgage industry efforts during the pandemic, together with a strong economy, with helping prevent millions of unnecessary foreclosures.
Those details explain why the original article treated the increase as a move away from exceptionally low activity, rather than evidence that another foreclosure crisis was taking shape.
Relief Options Helped Homeowners Stay in Their Homes
The relief programs were more than background information for a market report. As the original article explained, those options allowed millions of homeowners to remain in their homes and work toward getting back on their feet during a difficult period.
That is an important part of understanding the foreclosure numbers. The low filing totals reflected assistance that helped homeowners, not simply an absence of financial hardship.
When evaluating the later increase, keep that connection in view. The report’s comparison began with a period shaped by forbearance and other relief measures. Without that explanation, the headline percentage leaves out a major part of the story.
Home Equity Provided Another Way Out
The original article also pointed to rising home values. As values increased, many homeowners who might otherwise have faced foreclosure were able to use their equity to sell their houses instead.
In the period covered by the article, that pattern was continuing. For those homeowners, selling offered an alternative to foreclosure.
This does not mean every homeowner had the same options. The article’s claim was about many homeowners who could use their equity, not a promise that selling would solve every financial difficulty.
The useful distinction is straightforward: financial pressure did not always result in a foreclosure. Relief programs helped some homeowners remain in place, while equity allowed others to sell rather than face foreclosure.
Compare the Totals With the Housing Bust
A large percentage increase can bring back memories of the housing crash. But the original article emphasized that foreclosure activity in the cited report remained far below the record-high 2.9 million foreclosures reported during the housing bust.
That historical comparison matters alongside the annual percentage change. One tells you how quickly activity changed from a particular starting point. The other helps put the overall level in perspective.
What the Expert Forecast Actually Said
Bill McBride, founder and author of Calculated Risk, expected foreclosures to increase from record-low levels over the following year. However, he did not expect the huge wave of distressed sales that followed the housing bubble.
He explained that distressed sales during the housing bust had led to cascading price declines and forecast that the same pattern would not repeat in the period he was discussing.
That was an assessment of the conditions covered by the original article, not an evergreen promise about prices. Its reasoning supported the article’s conclusion that the expected foreclosure increase was nowhere near crisis levels and would not produce a repeat of that housing crash.
Read the Headline, Then Ask Better Questions
Before letting a foreclosure story drive your homebuying or selling decision, look for the context behind it:
- What is the comparison point? Find out whether the increase starts from record lows or a more typical period.
- What does the other comparison show? In the cited report, filings were up sharply annually but below the pre-pandemic level.
- What helped homeowners avoid foreclosure? Look for the role of relief options and home equity.
- Is an expert describing data or making a forecast? Keep historical observations separate from expectations about what comes next.
Bottom Line
The original article’s message was not to ignore foreclosures. It was to avoid confusing an increase from record lows with a repeat of the housing bust.
Your practical next step is to bring the headline, its source and your questions to a conversation about your own plans. If you are considering buying, selling or reviewing your mortgage options, reach out to Ed Parcaut for a straightforward discussion.
