Diminishing supply of homes poised for potential turnaround

by Lindsey Wells

A surge of homes could hit the market in the coming weeks as some mortgages exit forbearance, forcing some struggling home owners to sell.

In July, the average price of a home was $360,000, up almost 20% in a year. Low borrowing rates, strong demand for more living and work-from-home space and tight supply have driven up real estate prices, Florida Realtors reported.

Home owners struggling to pay their mortgages were relieved of making those payments for months as COVID-19 cases peaked.

In May 2020, more than 4 million homeowners nationwide were in forbearance, allowing them to delay payments. By mid-August of this year, that number had dropped to 1.6 million people, according to the Mortgage Bankers Association. One out of every 31 borrowers opted to postpone their mortgage payments, many for more than six consecutive months.

The federal moratorium on foreclosures expired in July, which may spark those struggling homeowners to sell their homes before risking foreclosure.

Zillow estimated 850,000 homeowners would have their mortgages exit forbearance between August and October of this year, potentially pushing tens of thousands more homes onto the market. Any early evidence of this new supply will begin showing up in August, according to the data released by Zillow.

Read More Related to This Post

Join the conversation

New Subscribe