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  • No New Inventory Projected From Delinquent Loans

    Wednesday, February 10, 2021   /   by Jennifer Marsh

    No New Inventory Projected From Delinquent Loans

    Today, Core Logic published their Loan Performance Insights report for November 2020.  5.9% of mortgages were delinquent by 30 or more days in November, which is up from 3.9% in November 2019, before the COVID-19 pandemic hit.  Serious delinquent loans plus loans in foreclosure are at 3.9%, which is the lowest rate reported since June 2020.  The declining level of delinquency suggests increasing stabilization and reinforces our view that we are unlikely to see a large amount of distressed inventory coming to market over the next 12 months.  Some of our clients might be thinking there may be a glut of new properties coming to the market because of forbearance loans coming due, or foreclosures in general.  And the logic that follows is that it may mitigate the current supply/demand imbalance. The bottom line difference between today's defaults and those that we witnessed in the 2007-2008 crash is the equity position owners have, as the market has broadly recovered beyond the 2006 market peak in most locations - e.g. there was a time when over half of Arizonans were under water (owed more than there home was worth). Today, of course, things are much different.  Its also worth mentioning the housing market is sustained in no small part by record low interest rates (have you seen how low they are?).  We expect to see low rates for the foreseeable future, too.  It is the right time to buy.  Do not sit on the sidelines waiting for a market decline.