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Foreclosure activity rises 21% year over year but stays in normal risk range

HousingWire points to high homeowner equity and a low total loan-to-value of 45.1% to argue the data does not match the 2005 to 2008 credit bust pattern.

Reported · Written up by our desk · Residential

Foreclosure activity rose 21% year over year, but HousingWire argues the broader backdrop does not resemble the 2005 to 2008 credit bust.

The outlet cites high homeowner equity, a low total loan-to-value ratio of 45.1%, and a mortgage mix weighted toward fixed-rate loans, saying those factors reduce the likelihood of widespread forced selling.

HousingWire also disputes claims of an unusually severe housing seller versus buyer imbalance, noting active home listings were higher in 2007 at 4 million versus 1.56 million today, while “normal” levels are described as roughly 2 million to 2.5 million.

The piece adds that delinquency rates have historically included about 1% to 4% of mortgage loans at some stage, and says foreclosure counts tend to move back toward routine levels over time rather than signaling a new cycle of mass credit stress.

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