1) Alarming amount of foreclosures? 2)Housing market SLOWING down

[Greg R.]

https://mortgageorb.com/forecl...

Foreclosure filings are up 132% from a year ago. Yes, one hundred thirty-two percent... and the housing market is showing signs of slowing.

On the first point... I'm wondering if the chickens have come home to roost. A ton of buyers have been over extending over the last 2 years and seemingly willing to bankrupt their future by bidding 50k, 100k, or even more over list for their "dream home". Over the last year there have been a ton of government handouts, including "child tax credit", "enhanced unemployment benefits", etc., that could have given people a false sense of security and propelled them into poor decisions.

One other scenario that's possible is that covid forbearance (cares act) expired. Individuals claiming a "covid hardship" were able to skip 18 (maybe more) mortgage payments. Individuals that were unable to qualify for deferment and not able to meet terms of a repayment plan could have been caught in a major pickle. Timing seems about right being that the pandemic kicked off about 26 months ago.

https://fortune.com/2022/04/15...

(a couple weeks old but still relevant) Point number 2... According to Redfin, 12% of homes on its site saw sellers cut prices in the week ending April 9. That was the biggest one-month spike Redfin saw in price cuts since 2015. Over the past month, there was also a 3% drop in requests for home tours.

From taking to my contacts in several different markets, boots on the ground are corroborating this. In 2 very hot markets that I'm involved with, I'm being told that a vast majority of the 50-100k over list offers are gone.

Are the rates to blame? "The sharp increase in mortgage rates is pushing more homebuyers out of
the market," wrote Daryl Fairweather, chief economist at Redfin.

It's simple economics... skyrocketing rates + skyrocketing prices don't create an exploding real estate market. Historic low rates + skyrocketing prices? Yup, that works. However, I'm sure I'll be hearing from the group that insists that prices are going to increase another gazillion percent in 2022 even if rates are 6-7%+, and that a crash of the housing market is impossible.