Foreclosures are up. But is the housing market headed for a crash?

May 2, 2023

Foreclosures are up. But is the housing market headed for a crash?

AP Photo/David Zalubowski

Foreclosure notices ticked up nationwide in the first quarter of the year with more than 65,000 properties beginning to go through the process.

There were 36,617 new filings in March, which marks the 23rd consecutive month with a year-over-year increase in foreclosure activity, according to a recent report from ATTOM. They were up 3 percent from the previous quarter and 29 percent year-over-year.

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Yet economists say housing market conditions are different from the 2008 housing crash partly due to enormous equity homeowners gained in their homes in recent years and overall higher credit scores.

Homeowners are in better shape than in 2008

A home for sale is seen
A home for sale is seen on Dec. 8, 2020, in Orlando, Fla. (Associated Press)

“Foreclosures, while rising, remain at a historically low level and pose little risk to the outlook for housing in the coming year,” Matthew Walsh, housing economist at Moody’s Analytics, told The Hill.


“This housing correction is very different than the one in 2008: Homeowners have a lot of equity given the quick pace of appreciation over the last two years, and underwriting remains strong,” Walsh said.

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Walsh added that the share of mortgages to borrowers with credit scores below 700 is at a record low.

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