Will there be a wave of foreclosures in the last half of 2024?

Most signs point to “No.”

The percentage of mortgages that are seriously delinquent, meaning three months or more behind on payments or in the foreclosure process, have been plummeting since 2022.

For there to be a wave of foreclosures, the number of people who aren’t able to make their mortgage payments would need to substantially rise.

Prior to the last foreclosure wave in 2008, there were fairly loose lending standards. A lot of mortgages were approved for buyers who did not have to demonstrate that they would be able to make payments. There were a number of “no income” loans, meaning buyers could be approved for loans without having income or employment verified. After the foreclosure crisis in 2008, banks tightened lending standards, and buyers are under much more stringent scrutiny when applying for a mortgage. This has resulted in buyers, in general, being more qualified for the mortgages they have been approved for, and therefore there are less defaults in payments.

The other reason there most likely will not be a huge wave of foreclosures is due to many mortgagees having equity in their homes. If homeowners find themselves unable to make payments, there is less of a likelihood of them not being able to sell their home and pay off their mortgage.

Thank you to Keeping Current Matters for the data provided from Fannie Mae and Freddie Mac to show the mortgage delinquencies drop.

If you are considering buying or selling a Towson home, please contact me. I would love to help!