News & Updates

It seems apparent that price trends in housing remain unsustainable. The S&P CoreLogic Case-Shiller 20-metro-area house price index has steadily risen since the middle of last year and has averaged 11% growth thus far in 2021.[i]  In fact, home prices have never been higher. The median existing-home sales price in May topped $350,000 for the first time, the National Association of Realtors said Tuesday. That figure is nearly 24% higher than a year ago, the biggest year-over-year price increase NAR has recorded in data going back to 1999.[ii]  All of this to the resultant frustration and exclusion of younger would-be buyers.[iii]

Part of price growth is tied to interest rates, which are being kept artificially low due to the Fed’s continued purchases of mortgage-backed securities, but rates appear to be only part of what’s happening.[iv]  Current reports estimate that due to years of underbuilding the U.S. housing market has a deficit of around 5.5 million units.[v]  Thus, clearly, inventory is also an issue driving prices. Which brings us to the current federal moratoriums on foreclosure and the effect they have in exacerbating a lack of available homes.

While it is no one’s wish to address a shortfall in housing exclusively through judicial sales, foreclosures serve an important role in our economy by allowing for the turnover of properties. All government programs have winners and losers, and some first-time buyers may find opportunities when the moratoriums are allowed to expire. As of this writing, an estimated 2.1 million homeowners remain in forbearance plans.[vi]  Overlapping the forbearance numbers, 2.5 million properties are 30 or more days past due and an additional 1.7 million remain 90 days or more past due, none of which are in foreclosure.[vii]  These numbers of course represent a significant portion of the shortfall mentioned earlier.