Are all of the Forbearance going to cause a market crash similar to what we had in 2008? My name is Tristan Colborg with TheDenverRealEstateAgent.com and eXp Realty in Denver.
As of February 14th, The Mortgage Bankers Association has information on this. And it looks like we are in pretty good shape. 84% of people who entered into Forbearance are either out of it or working through it to set up repayment plans. 50.8% are paid in full, 33.6% worked out a repayment plan, and only 15.6% are still in trouble.
What’s Happening With Forbearances?
It’s essential to understand what’s happening with Forbearance. Numbers since May continue to go down, and as of now, only about 5.22% of all mortgages are in Forbearance. So we keep hearing all this information in the news about how we are going to crash because Forbearance is so high, but if you look at the facts, that isn’t true.
According to experts, they forecast an increase of 5.9% on average for appreciation in home prices for 2021. Also, Americans are concerned, and we see scary headlines that the market will crash because of home prices increasing so quickly. However, if we compare the Average Price in home appreciation from 2002 to 2005 leading up to the 2008 crash, the average annual appreciation was 10.3%. If you look at now, from 2017 to 2020, the average yearly appreciation for home prices is only 6.3% which is drastically less.
That is a very, very different situation today. It’s easy to listen to the news, but it seems there is a lot of hype and negativity around what is happening and not based upon facts.
Tristan Colborg here with TheDenverRealEstateAgent.com and eXp Realty in Denver, and I would love to help educate you about the Denver Housing market. If you are thinking about selling or buying a home or have any questions, I am always here to help. And remember, you deserve an elevated real estate experience.