KC Foreclosure Activity Is Still Lower than the Norm

The increase in foreclosures in the current Kansas City housing market has been making headlines recently, leaving many homeowners uneasy about what lies ahead. It's essential to remember that clickbait titles don't always tell the whole story.

So what is the truth? If you compare current KC housing market data with typical market trends, there is no cause for concern.

Putting the Headlines into Perspective

The rise in foreclosures the media is drawing attention to is misleading since they're only comparing the most recent numbers to a time when foreclosures were at historic lows. This comparison makes the increase appear more significant than the reality.

In 2020 and 2021, the moratorium and forbearance program helped millions of homeowners stay in their homes, giving them the opportunity to get back on their feet during a very challenging period.

When the moratorium ended, there was an anticipated rise in foreclosures. However, just because foreclosures are up doesn't mean the Kansas City housing market is in trouble.

Historical Data Reveals There Isn't a Wave of Foreclosures

It's better to compare current data with long-term trends rather than the last few abnormal years. Specifically, it's helpful to compare today's numbers to the housing crash since many worry that it will happen again.

Let's take a look at the graph below, which uses foreclosure data from ATTOM, a property data provider, to show foreclosure activity has been consistently lower (shown in orange) since the crash in 2008 (shown in red):

While foreclosure filings are higher in the latest report, it's clear this rise is nothing like it was during the crash.

In fact, we're not even back at the levels we'd see in more typical years like 2019. As Rick Sharga, Founder and CEO of the CJ Patrick Company, explains:

"Foreclosure activity is still only at about 60% of pre-pandemic levels. . ."

These lower levels are mainly because Kansas City buyers today are more qualified and less likely to default on their loans. Delinquency rates remain low, and the majority of KC homeowners have enough equity to prevent them from going into foreclosure. As Molly Boesel, Principal Economist at CoreLogic, says:

"U.S. mortgage delinquency rates remained healthy in October, with the overall delinquency rate unchanged from a year earlier and the serious delinquency rate remaining at a historic low… borrowers in later stages of delinquencies are finding alternatives to defaulting on their home loans."

The reality is this: while there is an increase, the current data shows that the Kansas City housing market is not currently in a foreclosure crisis, nor is it headed toward one.

Bottom Line

Even though the Kansas City housing market is experiencing an expected increase in foreclosures, these numbers are nowhere near the crisis levels of the housing bubble burst. Do you have questions about current Kansas City housing market headlines? The Just Say Home KC Team can clarify the most recent data and what it means for you!

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