In December of 2021, the protections put in place by the Consumer Finance Protection Bureau to help borrowers affected by COVID-19 came to an end. Many of these borrowers entered loss mitigation plans with their lenders to avoid foreclosure. But even with a loss mitigation plan in place, one study says that about 72% of borrowers are still unable to make payments on their home mortgage loan.
This begs the question; will we see an increase in foreclosures in the coming months? Here’s what you need to know.
Will the Number of Foreclosures Increase in 2022?
It’s hard to say what will happen with mortgage foreclosures in the coming months. If the pandemic taught us anything, it’s that unexpected things happen in the housing market. No one could have predicted the homebuying craze and bidding wars that occurred in 2021.
However, if the beginning of this year is any indicator of what the coming months will look like, it may not be pretty. After the government’s eviction moratorium ended on December 31, 2021, foreclosure activity hit its highest point in January of 2022 since the beginning of the pandemic.
While opinions are divided, some experts are saying that they expect to see an increase in the number of foreclosures in the coming months.
What Does This Mean for Current Homebuyers?
So, what does all this mean for borrowers who are interested in buying a home in 2022?
Well, if you’re looking to purchase a home, now may be a good time to consider a foreclosed home. Buying a foreclosed home may allow you to get a good deal on a property. Foreclosed homes are usually priced cheaper. And since they take longer to close on, there’s usually less competition since many buyers aren’t willing to wait around.
However, if you’re hoping that the increase in foreclosures will help end the housing shortage, chances are, you’re out of luck. Experts are saying that even with more foreclosure homes becoming available, it’s not enough to close the gap in demand. It’s unlikely that we will see an end to the housing shortage now or anytime in the near future.
Interested in Buying?
We’d love to talk! Whether you’re interested in purchasing a new construction home, a foreclosed property, or another type of home, we’re here to help. We’ve helped countless homebuyers achieve their dream of homeownership. Call our office today to discuss home mortgage loans with an expert.