{"id":5020,"date":"2023-02-21T10:43:00","date_gmt":"2023-02-21T14:43:00","guid":{"rendered":"https:\/\/propertyonion.com\/education\/?p=5020"},"modified":"2023-02-28T10:14:57","modified_gmt":"2023-02-28T14:14:57","slug":"2023-foreclosure-predictions","status":"publish","type":"post","link":"https:\/\/propertyonion.com\/education\/2023-foreclosure-predictions\/","title":{"rendered":"2023 Foreclosure Predictions"},"content":{"rendered":"\n<p>We all quietly tiptoed into 2023 with the hopes for a better year. For the housing market, it looks like they threw a wild party, and we are left mopping up all the spilled drinks. What does that mean? Well, 2022 was a wild ride for the housing market.<\/p>\n\n\n\n<p><a rel=\"noreferrer noopener\" aria-label=\"Mortgage rates (opens in a new tab)\" href=\"https:\/\/propertyonion.com\/education\/mortgage-rate-predictions-for-2023\/\" target=\"_blank\">Mortgage rates<\/a> started 2023 at a multi-decade high, and housing inventory has been on lockdown. Many people purchased their homes at a low mortgage rate and are comfortable staying put, causing inventory for the housing market to be tight. This is the main reason why home prices are holding steady.\u00a0<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>It has become increasingly hard for homebuyers to gain access to affordable housing.&nbsp;<\/p><\/blockquote>\n\n\n\n<p>We rolled into 2023 uncertain about where the housing market is leading. Let\u2019s take a look at <a href=\"https:\/\/propertyonion.com\/education\/expert-predictions-on-mortgage-rates-for-2023\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"predictions for the housing market this year (opens in a new tab)\">predictions for the housing market this year<\/a>, and if we will have a spike in foreclosures.&nbsp;<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_81 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">In this Article:<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/propertyonion.com\/education\/2023-foreclosure-predictions\/#What_Is_the_Housing_Market_Forecast_for_2023\" >What Is the Housing Market Forecast for 2023?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/propertyonion.com\/education\/2023-foreclosure-predictions\/#Will_There_Be_a_Lot_of_Foreclosures_in_2023\" >Will There Be a Lot of Foreclosures in 2023?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/propertyonion.com\/education\/2023-foreclosure-predictions\/#Will_Foreclosure_Rates_Go_Up_or_Remain_the_Same_in_2023\" >Will Foreclosure Rates Go Up or Remain the Same in 2023?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/propertyonion.com\/education\/2023-foreclosure-predictions\/#How_High_Will_Foreclosure_Rates_Go\" >How High Will Foreclosure Rates Go?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/propertyonion.com\/education\/2023-foreclosure-predictions\/#Foreclosure_Rates_By_State_in_2023\" >Foreclosure Rates By State in 2023<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Is_the_Housing_Market_Forecast_for_2023\"><\/span>What Is the Housing Market Forecast for 2023?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Due to the uncertainty of the economy at the moment, it may be easy to predict that <a rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\" href=\"https:\/\/propertyonion.com\/education\/11-questions-newbies-have-about-starting-in-foreclosure-auctions\/\" target=\"_blank\">2023 will be filled with foreclosures<\/a>.<\/p>\n\n\n\n<p>The housing market had a few great years, and now, it appears that the market is trying to correct itself. However, this will be a slow process. At the moment, mortgage rates are still double what they were a year ago, while nationwide home prices are on a steady incline even with an overall decline in total sales. As a result, it has become increasingly hard for homebuyers to gain access to affordable housing.&nbsp;<\/p>\n\n\n\n<p>According to the&nbsp;<a href=\"https:\/\/www.nar.realtor\/newsroom\/existing-home-sales-dipped-7-7-in-november\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">National Association of Realtors (NAR)<\/a>,&nbsp;<em>\u201cthe median existing-home sales price rose to $370,700, an increase of 3.5% from one year ago.\u201d&nbsp;<\/em>These higher housing prices have taken their toll on those looking to buy a home, as mortgage loans hit an all-time low over the last 25 years.&nbsp;<\/p>\n\n\n\n<p>From October to November, home sales decreased by 7.7%, which marks the 10th consecutive month of declining sales. Home sales are down 35% when compared to the sales recorded a year ago. This has some experts stating that the housing market has already hit its bottom.&nbsp;<\/p>\n\n\n\n<p>With that said, mortgage rates are starting to stabilize around 6%, and experts believe the housing market will turn around in 2023.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>Since unemployment rates are still low, we may continue to see low levels of foreclosure activity. <\/p><\/blockquote>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Will_There_Be_a_Lot_of_Foreclosures_in_2023\"><\/span>Will There Be a Lot of Foreclosures in 2023?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>After the nationwide pandemic, foreclosures have been on a steady rise. According to&nbsp;<a href=\"https:\/\/newslink.mba.org\/mba-newslinks\/2022\/december\/mba-newslink-thursday-dec-8-2022\/attom-foreclosure-completions-up-64\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\" (opens in a new tab)\">ATTOM Data&nbsp;<\/a>Solutions, foreclosures have hit their peak. Foreclosure rates are up 57% compared to a year ago, but they are down 5% from October 2022.<\/p>\n\n\n\n<p>Foreclosures in November almost doubled compared to a year ago; however, they are 80% above pre-pandemic levels. Since unemployment rates are still low, we may continue to see low levels of foreclosure activity. In addition, delinquency payments on mortgages are lower than the historical averages.&nbsp;<\/p>\n\n\n\n<p>The main difference when comparing our current housing crisis to the last is the fact that many homeowners have had a big boost in the value of their homes, meaning that the home has more equity than it is worth.&nbsp;<\/p>\n\n\n\n<p>This means that a homeowner could choose to sell their home and walk away with some money after repaying their mortgage. However, not all homeowners have this ability, so the foreclosure rates could continue to increase in 2023.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Will_Foreclosure_Rates_Go_Up_or_Remain_the_Same_in_2023\"><\/span>Will Foreclosure Rates Go Up or Remain the Same in 2023?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Trends show us that foreclosure rates will continue to increase in 2023. Below, we will discuss the reasons.&nbsp;<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p>COVID foreclosure protection laws expired at the end of 2021, which caused an influx of foreclosure activity in 2022. <\/p><\/blockquote>\n\n\n\n<h3 class=\"wp-block-heading\">Inflation can cause high foreclosure rates<\/h3>\n\n\n\n<p><a href=\"https:\/\/propertyonion.com\/education\/what-is-the-effect-of-inflation-on-housing-prices\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Inflation (opens in a new tab)\">Inflation<\/a> can make it increasingly difficult for individuals to keep up with their current mortgage payments. Prices have increased on everything, including cars, homes, utilities, and groceries. The cost of living has gone way up, which results in homeowners being strapped for cash each month. This equates to the homeowner being unable to make mortgage payments, resulting in foreclosure.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">How does a recession affect foreclosure rates?<\/h3>\n\n\n\n<p>As history shows, recessions tend to cause foreclosure rates to increase due to job layoffs, which can result in homeowners defaulting on their mortgages. With a recession, you will find many families struggling to meet daily necessities, and this directly results in bills becoming delinquent including mortgages.&nbsp;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">COVID-related foreclosure protections have expired<\/h3>\n\n\n\n<p>COVID foreclosure protection laws expired at the end of 2021, which caused an influx of foreclosure activity in 2022. These laws were only temporary, so it was only a matter of time before foreclosure rates normalized.&nbsp;<\/p>\n\n\n\n<p>Lenders offer various options to help homeowners get caught up or even skip a payment. However, even with this assistance, some individuals will have issues when it&#8217;s time to resume making mortgage payments.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_High_Will_Foreclosure_Rates_Go\"><\/span>How High Will Foreclosure Rates Go?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Currently, foreclosure rates are predicted to remain lower than pre-pandemic levels. This will continue until about mid-way through 2023. You may be wondering why foreclosure rates are predicted to remain lower than those seen pre-COVID.<\/p>\n\n\n\n<p><a href=\"https:\/\/propertyonion.com\/education\/will-rising-interest-rates-bring-more-foreclosures-in-2023\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"Mortgage interest rates (opens in a new tab)\">Mortgage interest rates<\/a> have increased to around 7%, which is a large increase compared to the 3% a year ago. An increase in interest rates will typically cause potential buyers to shy away from purchasing a home.&nbsp;<\/p>\n\n\n\n<p>High-interest rates mean a larger monthly mortgage payment. This is something that a lot of individuals are not able to cope with. As a result, people will stop seeking mortgages, and the foreclosure rates will decrease.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Foreclosure_Rates_By_State_in_2023\"><\/span>Foreclosure Rates By State in 2023<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Historically speaking, some states are more affected by foreclosure rates than others. According to&nbsp;ATTOM,<em>&nbsp;\u201cone in every 4,580 housing units had a foreclosure filing in November. States with the highest foreclosure rates were again: Illinois (one in every 2,401 housing units); Delaware (one in every 2,736 housing units); New Jersey (one in every 2,916 housing units); South Carolina (one in every 3,195 housing units); and Wyoming (one in every 3,237 housing units).\u201d<\/em><\/p>\n\n\n\n<p>The report also said<em>, \u201clenders started the foreclosure process on 20,686 U.S. properties in November, down 5 percent from last month but up 98 percent from a year ago.\u201d<\/em><\/p>\n\n\n\n<p>Trying to predict which states will have the highest foreclosure rates in 2023 is not easy. High foreclosure rates will depend on employment, homeowner protection laws, and the housing market.&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>We all quietly tiptoed into 2023 with the hopes for a better year. For the housing market, it looks like they threw a wild party, and we are left mopping up all the spilled drinks.&hellip;<\/p>\n","protected":false},"author":48,"featured_media":5026,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[544,351,419,116,376,3,392,394,543,67],"class_list":["post-5020","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-real-estate-investing-articles","tag-attom","tag-covid","tag-florida-real-estate","tag-foreclosures","tag-housing-market","tag-investing","tag-market-predictions","tag-mortgage-rates","tag-protection-laws","tag-real-estate"],"_links":{"self":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/5020","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/comments?post=5020"}],"version-history":[{"count":6,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/5020\/revisions"}],"predecessor-version":[{"id":5072,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/posts\/5020\/revisions\/5072"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media\/5026"}],"wp:attachment":[{"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/media?parent=5020"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/categories?post=5020"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/propertyonion.com\/education\/wp-json\/wp\/v2\/tags?post=5020"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}