IN THE NEWS: Homes in Forbearance Have Equity
One concern about the current housing market is the homes in mortgage forbearance (taking a break from making mortgage payments).
Some worry that when the forbearance period ends, these homeowners will owe more than their home is worth, causing them to foreclose or sell for less than they owe (a short sale).
One reason people worry about these is that both foreclosures and short sales were common during the housing market crash that brought about the Great Recession.
Conditions are different now, though. People have borrowed less against their homes, and price increases of the last few years - especially during the covid (forbearance) period - mean most people in the country have a good amount of equity.
In fact, 9 out of 10 homeowners in forbearance have at least 11% equity in their home. What does the mean in practical terms? It means that, if they HAD to sell, nearly all of them have enough equity to pay off their homes and stay out of both foreclosure and a short sale.
See the video for more and let me know if you have Qs about how much equity is in YOUR home.