Among the many stopgap subsidies that governments instituted during the pandemic was a freeze on home-loan foreclosures. When the federal barrier was lifted last year (various state measures carried their own expirations) we read and heard much wailing about a wave of mortgage holders who would be cast out onto the streets. Well, the latest data this month (for the first half of 2022) from ATTOM, the go-to source, shows this is not (yet?) occurring. Naturally, there’s a big leap from a year earlier, when the foreclosure limits were still in place, but the totals are less than in early 2020 and considerably below pre-Covid 2019, when the economy was really perking along. So is the crisis still coming? Some outlets keep screaming about it, citing the same data source from earlier in 2022. And yes, the economy is entering more volatile times, with spending pinched by inflation and interest rates rising, but nearly everybody willing to work has a job and unless the bar charts reverse, we’re going to continue to see subdued foreclosure activity. Indeed, that’s what we should expect after a window of exceedingly low mortgage (including re-fi) rates, and an end to many of the subprime lending practices in the housing market that brought on trouble a decade or so ago. The only holdover from that earlier period, as ATTOM’s release notes, are extraordinarily long stretches to complete foreclosure—a deterrent to new mortgage availability. The lesson so far seems to be that most people find ways to adapt when markets are allowed to clear and political cushions are removed.
Tim W. Ferguson 