Will coronavirus-induced foreclosures hit Great Recession levels?
8 advantages U.S. homeowners have now that they didn’t then
It was a mere 12 years ago that the freefall of the housing market nearly took down the entire U.S. economy.
The housing market crash of 2008 still strongly resonates in the nightmares of those who follow the economy –– even more so for the homeowners of the estimated 10 million homes that foreclosed between 2006 and 2016.
Today, a healthcare crisis is the storm of economic destruction rampaging through America. It is not surprising that the effect of COVID-19 and its aftermath on the U.S. housing market is closely watched. As bad as things are, it can certainly get worse if the U.S. housing market becomes one of the fatalities of COVID-19 due to mass foreclosures.
Thus, we attempt to balance a very tricky equation. On the one side, we have the sad circumstances that are driving American homes into distress and possible foreclosure, and on the other hand, efforts to mitigate this potential disaster.
If we examine the elements of this equation, we see on the negative side:
- Over 22 million jobless claims filed with an additional fifteen million jobs losses expected to be documented in the next report
- Nearly 3 million mortgages already in forbearance
- Purchase application data showing more abundant year-over-year deficits each week
- Lenders tightening credit, restricting the types of loans offered, and some lenders going out of business