If you’ve been following the news recently, you might have seen articles about an increase in foreclosures and bankruptcies. That could be making you feel uneasy, especially if you’re thinking about buying or selling a house.

But the truth is, even though the numbers are going up, the data shows the housing market isn’t headed for a crisis.

Foreclosure Activity Rising, but Less Than Headlines Suggest

In recent years, the number of foreclosures has been very low. That’s because, in 2020 and 2021, the forbearance program and other relief options were put in place to help many homeowners stay in their homes during that tough time.

When the moratorium ended, there was an expected rise in foreclosures. But just because they’re up, that doesn’t mean the housing market is in trouble.

To help you see how much things have changed since the housing crash in 2008, check out the graph below using research from ATTOM, a property data provider. It looks at properties with a foreclosure filing going all the way back to 2005 to show that there have been fewer foreclosures since the crash.

As you can see, foreclosure filings are inching back up to pre-pandemic numbers, but they’re still way lower than when the housing market crashed in 2008. And today, the tremendous amount of equity American homeowners have in their homes can help people sell and avoid foreclosure.

The Increase in Bankruptcies Isn’t Dramatic Either

As you can see below, the financial trouble many industries and small businesses felt during the pandemic didn’t cause a dramatic increase in bankruptcies. Still, the number of bankruptcies has gone up slightly since last year, nearly returning to 2021 levels. But that isn’t cause for alarm.

The numbers for 2021 and 2022 were lower than more typical years. That’s in part because the government provided trillions of dollars in aid to individuals and businesses during the pandemic. So, let’s instead focus on the bar for this year and compare it to the bar on the far left (2019). It shows the number of bankruptcies today is still nowhere near where it was before the pandemic. Both of these two factors are reasons why the housing market isn’t in danger of crashing.

Bottom Line

Right now, it’s crucial to understand the data. Foreclosures and bankruptcies are rising, but these leading indicators aren’t signaling trouble that would cause another crash.

Do negative headlines and talk on social media have you feeling worried about the housing market? Maybe you’ve even seen or heard something lately that scares you and makes you wonder if you should still buy or sell a home right now.

Regrettably, when news in the media isn’t easy to understand, it can make people feel scared and unsure. Similarly, negative talk on social media spreads fast and creates fear. As Jason Lewris, Co-Founder and Chief Data Officer at Parcl, says:

“In the absence of trustworthy, up-to-date information, real estate decisions are increasingly being driven by fear, uncertainty, and doubt.”

But it doesn’t have to be that way. Buying a home is a big decision, and it should be one you feel confident making. You should lean on a trusted real estate agent to help you separate fact from fiction and get the answers you need.

That agent will use their knowledge of what’s really happening with home prices, housing supply, expert forecasts, and more to give you the best possible advice. The National Association of Realtors (NAR) explains:

“. . . agents combat uncertainty and fear with a combination of historical perspective, training and facts.”

The right agent will help you figure out what’s going on at the national level and in your local area.

They’ll debunk headlines using data you can trust. Plus, they have in-depth knowledge of the industry and can provide context, so you know how current trends compare to the normal ebbs and flows in the housing market, historical data, and more.

Then, to make sure you have the full picture, an agent can tell you if your local area is following the national trend or if they’re seeing something different in your market. Together, you can use all that information to make the best possible decision.

After all, making a move is a potentially life-changing milestone. It should be something you feel ready for and excited about. And that’s where a trusted expert comes in.

Bottom Line

If you need reliable information about the housing market and expert advice about your own move, get in touch with a real estate agent in your area.

Some Highlights

• Here’s what you really need to know about a few myths causing fear in today’s housing market.
• Despite common misconceptions, many people can buy a home even if they have student loans, home prices are rising nationally (not falling), and you usually don’t have to have 20% for a down payment.
• If you have other fears or reservations about buying a home today, get in touch with a real estate expert who can help clear those up.

The idea of owning a home has always been a big part of the American Dream. It’s a symbol of stability, independence, and having a place to truly call your own. But for Gen Z, the “Zoomers” born between 1997 and 2012, making that dream a reality can feel like quite the challenge today with higher mortgage rates and rising home prices.

But achieving that goal of owning your first home can still be attainable, even today, with some strategic planning and resourcefulness.

Explore Down Payment Assistance Options

With prices rising all around you, it can be hard to save up for a home. If you’ve been struggling to stash away enough cash for that down payment, it’s worth it to look into the various down payment assistance programs available. These programs can really help you save big on the upfront costs of buying a home.

There are a lot more options out there than you may realize. According to Down Payment Resource, there are over 2,000 programs designed to help hopeful homebuyers with down payments and closing costs.

If you qualify for one of these programs, you may not need to save up as much money for your down payment. A local real estate agent can help you explore these programs in your area, making it much easier to turn your homeownership dream into a reality.

Consider Living with Relatives To Save

If you still need a bit more time to save, even with the down payment assistance programs out there, there are ways you can make that happen. Many savvy Zoomers have made a strategic choice to live with relatives so they can get to their savings goals even faster.

According to the National Association of Realtors (NAR), around 30% of Gen Z homebuyers transition directly from their relative’s home to a home of their own.

By sharing living costs, such as mortgage payments, utility bills, and even grocery expenses, you can substantially reduce your monthly expenses. This frees up more of your income to tackle any outstanding debt, boost your credit score, and reach your down payment target in less time. And, all of this can bring homeownership one step closer to becoming a reality. Clare Trapasso, Executive News Editor at Realtor.com, explains:

“Faced with ongoing housing affordability issues . . . we’re seeing parents and children becoming roommates again in later years as the ‘kids’ save up to purchase their own place . . .”

The Road to Homeownership

When you’re on the path to becoming a homeowner, it’s a good idea to get some help along the way. And one of your best resources on this journey as a young homebuyer is a trusted real estate agent. They’ll steer you through the process of buying a home and help you find one you can afford. 

Bottom Line

For Gen Z, the path to homeownership may not be straightforward, but it’s still within reach. With the right strategies, you can turn your dream of owning a home into a reality.  

Are you wondering if it makes sense to buy a home right now? While today’s mortgage rates might seem a bit intimidating, here are two compelling reasons why it still may be a good time to become a homeowner.

Home Values Appreciate over Time

There’s been a lot of confusion around what’s happened with home prices over the past two years. While they did dip ever so slightly in late 2022, this year they’ve been appreciating at a more normal pace, which is good news for the housing market. And while looking at price movement over just a year or two can make you worry prices are usually this unpredictable, history shows in the long run, home values rise (see graph below):

Using data from the Federal Reserve for the past 60 years, you can see the overall trend is home prices have climbed quite steadily. Sure, there was an exception around the housing crash of 2008 that caused prices to break the usual trend for a time, but overall, home values have been consistently on the rise.

Increasing home values is one great reason why buying may make more sense than renting. As prices rise, and as you pay down your mortgage, you build equity. Over time, that growing equity gives your net worth a boost.

Rent Keeps Going Up Through the Years

Another reason you may want to consider buying a home instead of renting is the never-ending rent hike. If you’ve ever felt the pinch of rent increasing year after year, you’re not alone. That’s because, rents have climbed steadily over the past six decades (see graph below):

By buying a home, you can lock in your monthly housing costs and bid farewell to those pesky rent hikes. That stability is a game-changer.

In the end, it all boils down to this: your housing payments are an investment, and you’ve got a choice to make. Do you want to invest in yourself or your landlord?

By becoming a homeowner, you’re investing in your own future. When you rent, that’s money you never get back.

When you factor in home values consistently rising, plus the opportunity to get relief from never-ending rent hikes, homeownership can be a path to financial security. As Dr. Jessica Lautz, Deputy Chief Economist and VP of Research at the National Association of Realtors (NAR), states: 

“If a homebuyer is financially stable, able to manage monthly mortgage costs and can handle the associated household maintenance expenses, then it makes sense to purchase a home.”

Bottom Line

When it comes down to it, buying a home offers more benefits than renting, even when mortgage rates are high. If you want to avoid increasing rents and take advantage of long-term home price appreciation, connect with a local real estate agent to go over your options.