Dr. Lisa Sturtevant, Virginia REALTORS® Chief Economist
While it might disappoint some frustrated buyers, there is little to suggest that existing homeowners will be forced into foreclosure when forbearance periods end. There are several reasons why we should not be waiting for a foreclosure wave:
- The sheer number of home loans in a forbearance program is very small. If Virginia looks like the U.S., there is probably only between four and five percent of mortgage holders currently in a forbearance program.
- While some homeowners are still concerned about making loan payments, there are many families in relatively good financial situations and can easily resume payments when the forbearance period ends.
- The fast-paced housing market and rising home prices further minimize foreclosure risk. If homeowners are unable to make payments, they will be able to list their home for sale and attract many interested borrowers, which allows them to get out of their loan.