WILL FORECLOSURES RISE OR FALL?
Right now, a large number of homeowners are getting a reprieve from paying their mortgages. One provision of the CARES Act, signed into law in late March, was that borrowers were entitled to up to 360 days of mortgage forbearance. But once forbearance runs out, borrowers will have to start catching up on their missed payments and making good on their regular payments. And that could prove problematic for some people -- namely, those whose finances are still in bad shape due to the pandemic.
Here's my prediction for 2021, in which I hedge my bets and give you two competing scenarios.
We could see see an uptick of available foreclosed homes mid-2021. That may free up inventory for regular home buyers, and if enough foreclosures hit the market at the same time, it could start to depress prices.
We could see foreclosures fall. If the government provides further relief, or if the vaccine rolls out quickly enough for people to get re-employed, and if banks agree to new payment options to help people catch up, foreclosures may not happen in high numbers. That's a lot of if's.