Earlier this week, we learned that home prices are at record highs. But in a bit of good news from the housing market, foreclosures are down almost 24% from the same time last year, according to new research out Thursday from the real estate data firm ATTOM.

There was a moratorium on foreclosures during the height of pandemic. The CARES Act prohibited them from March 2020 through July of 2021 unless a home was vacant or abandoned. And that turned out to be really effective, said Nicole Bachaud, a senior economist at Zillow. 

“So we had these programs in place that helped people who maybe had a gap in income or a job loss be able to maintain their status as homeowners, be able to maintain their mortgage in a healthy way,” she said.

The data from ATTOM shows there was a surge of foreclosures when the moratorium expired. But Bachaud noted that it wasn’t nearly as bad as during the Great Recession after the housing bubble burst.

That’s because homeowners who are now struggling have an alternative: “We saw so much home value growth that instead of having to turn to a foreclosure, those folks can just go to the open market and sell their home.”

We’re also not seeing as many zombie homes, the houses abandoned when their owners can’t pay the mortgage. ATTOM says the number of zombie houses has sunk to its lowest level since early 2021.

Tomasz Piskorski, who teaches finance at Columbia Business School, doesn’t see foreclosures surging again anytime soon.

“Unless we have a significant increase in unemployment, I don’t see a very big wave of foreclosures there,” he said.

The unemployment rate, Piskorski said, would have to spike a lot to spark a foreclosure wave. It’s now just under 4% — way lower than the 10% we had in October of 2009. And even if the economy does turn sour, people getting mortgages today are in good financial shape, added Jacob Channel, senior economist at Lending Tree.

“If you are getting approved for a loan right now, there’s a very, very good chance that your lender did a lot of due diligence to ensure you can actually afford that loan over the long term,” he said.

Channel noted that there might be a higher risk of foreclosure for some more recent homebuyers, but he thinks most of them will have no trouble keeping up with their payments. The banks made sure of that. 

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