How Today’s Market is Different from the Foreclosures of 2008 Housing Market

It helps to compare today’s situation with what happened back in 2008. Research from ATTOM, a property data company, shows fewer homeowners are now in foreclosure than during the 2008 housing crisis. Back then, foreclosures surged and overwhelmed the market. The numbers are much lower today and have even dipped slightly in recent reports. This indicates we’re not in the same trouble we saw in 2008.

You might notice that foreclosure filings have increased slightly since 2020 and 2021. However, this is due to the temporary foreclosure ban during those years, which helped homeowners during tough financial times. That ban kept foreclosure numbers unusually low. When you step back and look at the whole picture, you’ll see that foreclosure filings are much lower overall than in the past.

The key reason is that homeowners today have much more equity in their homes compared to 2008. As Bankrate explains:

“After the housing crash, millions of foreclosures hit the market, pushing prices down. That’s not happening now. Most homeowners have a strong equity cushion in their homes.”

This equity acts as a safety net, allowing many homeowners to avoid foreclosure despite financial struggles. If someone is having trouble making their mortgage payments, they can often sell their home to avoid foreclosure, unlike during the 2008 crash, when many owed more on their homes than they were worth.