MINT HILL, NC – The mortgage forbearance program was put into place due to the pandemic. This program allows some borrowers to press the pause button on their mortgage payments.
At the height of COVID-19, around 7.2 million homeowners were using the program. Now, the number is down to just 1.7 million. However, this number is headed to zero very soon.
The current administration doesn’t plan to issue another extension of the program. This means on September 30th, the mortgage forbearance program will end. While not all borrowers will be removed from the program at once, within a few months, the program will no longer be used.
Will This Shake Up the Housing Market?
The country has more than 80 million homeowners, so 1.7 million probably doesn’t seem like very many. However, there are also about 600,000 homes for sale right now, according to REALTOR.com. The number of homes for sale is the lowest it has been in four decades. It won’t take a very large percentage of the 1.7 million struggling homeowners deciding to sell to see a pretty big shakeup in the real estate market.
A Crash is Not Likely
While the combination of the marketing starting to cool just a bit and the forbearance program ending might shake up the market, a crash int not likely. The short term will likely see inventory go up, but it won’t go up enough to keep homes from getting multiple offers.
The crash in 2008 was due to many homeowners not having any equity to work with and getting behind on payments. This time around, it’s likely many of the homeowners using the forbearance program have equity and can simply sell and walk away from their homes if they decide to.
Markets across the country could see quite a bit more inventory in the coming months. This is likely good news for buyers, but it doesn’t necessarily mean prices will come down much, or at all. It’s hard to tell exactly how this will impact the market without knowing how many of the 1.7 million borrowers will sell. Only time will tell, but we will know sooner, rather than later.
I would love to be part of your journey when the time is right for you. If you ever have a real estate question or need, or know someone who does, trust that you can turn to me. I will help you make the right move! Anna Granger (704) 650-5707 | email@example.com | www.1stchoicepropertiesinc.com