Introduction
If you’ve been following the news recently, you might have seen articles about an increase in foreclosures and bankruptcies. That could make you feel uneasy, especially if you’re thinking about buying or selling a house. However, in this article, we will dive deeper into the data to provide you with a more accurate perspective on the current housing market situation.

Foreclosure Activity Rising, but Less Than Headlines Suggest
In recent years, the number of foreclosures has been relatively low. That’s because, in 2020 and 2021, the forbearance program and other relief options were put in place to help many homeowners stay in their homes during those tough times.

When the moratorium ended, there was an expected rise in foreclosures. But just because they’re on the rise, it doesn’t necessarily mean the housing market is in trouble. Let’s take a closer look at the data to understand the bigger picture.

A Historical Perspective
To help you see how much things have changed since the housing crash in 2008, let’s examine the data. We’ll refer to research from ATTOM, a leading property data provider. The graph below looks at properties with a foreclosure filing dating back to 2005, demonstrating that while foreclosure filings are inching back up to pre-pandemic numbers, they’re still significantly lower than when the housing market crashed in 2008. Today, the tremendous amount of equity American homeowners have in their homes can help people sell and avoid foreclosure.

The Increase in Bankruptcies Isn’t Dramatic Either
As you can see below, the financial troubles many industries and small businesses experienced during the pandemic didn’t cause a dramatic increase in bankruptcies. Still, the number of bankruptcies has gone up slightly since last year, nearly returning to 2021 levels. But this isn’t cause for alarm.

The numbers for 2021 and 2022 were lower than more typical years, largely due to the government providing trillions of dollars in aid to individuals and businesses during the pandemic. To get a better perspective, let’s focus on the bar for this year and compare it to the bar on the far left (2019). It shows that the number of bankruptcies today is still nowhere near where it was before the pandemic. Both of these factors are reasons why the housing market isn’t in danger of crashing.

Bottom Line
It’s crucial to understand the data. Foreclosures and bankruptcies are indeed rising, but these leading indicators aren’t signaling trouble that would cause another housing market crash. By examining the historical context and the impact of government assistance, we can gain a more realistic view of the current situation. So, while the headlines may be alarming, the data suggests that the housing market remains stable.