Rising costs across the board have many people asking: Will more homeowners struggle with their mortgages, leading to a spike in foreclosures? While foreclosure filings have increased slightly in recent reports, the data tells a very different story—one that points to stability, not crisis.

This Is Not a Repeat of 2008

The housing crash of 2008 was fueled by risky lending, loose qualification standards, and homeowners carrying mortgages they couldn’t sustain. When prices dropped, many owed more than their homes were worth, and foreclosure rates skyrocketed.

Today’s market is fundamentally different:

• Stricter lending standards ensure homeowners are financially qualified from the start.
  
  
• Healthier household finances mean fewer people are at risk of defaulting.
  
  
• Lower foreclosure volume remains well below historical norms, even with the recent uptick.
  
  

It’s important to remember that recent years (2020–2021) saw artificially low foreclosure activity due to federal and state moratoriums. Comparing today’s numbers to those years creates a misleading sense of “increase.” When measured against pre-pandemic norms, current activity is actually modest.

Why Foreclosures Are Staying Low

A key factor is homeowner equity. Over the past several years, strong price appreciation has built significant financial cushions for homeowners. This equity acts as a safety net—if someone faces financial hardship, they can often sell their home rather than face foreclosure.

Industry experts agree:

• Rob Barber, CEO of ATTOM: “Strong home equity positions in many markets continue to help buffer against a more significant spike.”
  
  
• Rick Sharga, CEO of CJ Patrick Company: “Homeowners—including those in foreclosure—possess an unprecedented amount of home equity.”
  
  

This is a crucial distinction from 2008, when millions of households were underwater and had no exit strategy.

What It Means for the Market

While any foreclosure is difficult for the family involved, today’s figures don’t indicate systemic risk. With most owners in a strong equity position, the chances of a foreclosure wave overwhelming the market remain low.

For buyers, this means the influx of deeply discounted properties that occurred during the last crash is unlikely. For sellers, it’s a sign that overall market stability remains intact.

Bottom Line

Current foreclosure trends reflect normal market movement—not an impending crisis. Economic pressures may cause some homeowners to struggle, but strong lending practices and historically high equity levels provide a solid buffer.

If you’re facing financial challenges, connect with your mortgage provider early to explore options before foreclosure becomes a reality.