Honestly, we have no idea. We truly wish we had a crystal ball to be able to give you a firm answer. However, every month we post our musings about trends to give you more background and tools to decide for yourself.
When we start researching the potential of a housing crash it becomes very clear that opinions vary from one extreme to the other. One side insists it will not happen any time soon while the other side is convinced that we are on the brink of a housing Armageddon.
The Mortgage Banker Association reported that the percentage of mortgage delinquencies in Quarter 2 was at 4.4%. Compare that to a mortgage delinquency rate of 4.58% in Q4 in 2008 and it can seem unnerving. But dig a little deeper and you’ll see this rate includes all loans in forbearance for 90+ days. Remember, forbearance is when a mortgage company permits a homeowner to temporarily pay a lower mortgage payment or pause payments. The forbearance rate in September 2020 was 6.6%. A rise in reported delinquencies is expected when the forbearance rate is included in that statistic. It is important to keep in mind that these delinquencies might not indicate an impending foreclosure.
Closed businesses could be affecting home buyers and their ability to apply and pay for a mortgage. This could result in a reduced amount of home buyers combined with distressed homeowners needing to sell their houses. Decreased buyer demand + increased inventory = decreased home prices.
The bottom line is the numbers are skewed on the surface level. Research is more vital than ever.