The Foreclosure/Eviction Moratorium is Coming to an End. What Does This Mean for You?

Covid-19 has had a lasting effect on every aspect of our lives, our communities and our economy. On March 18, 2020, the Federal Housing Finance Authority (FHFA) and Department of Housing and Urban Development (HUD) announced a moratorium on federally backed mortgages and many privately backed lenders followed suit. On September 1, 2020, the Trump administration extended this relief to renters, as well. With the lockdown, the need for social distancing and so many people struggling with health issues, this was a welcome and appreciated relief, but we all knew it couldn't last forever. Effective July 31, 2021 the moratorium will end, despite the fact that many are still struggling financially.

As of July 2, 2021, 6.38% of all residential mortgage loans (14.67% of FHA loans) are in default and 6 million renters are still in default on their leases. The numbers are improving, but there are certainly a lot of distressed homeowners out there, meaning a lot of renters are facing eviction the end of this month, and a lot of homeowners are on the cusp of foreclosure.

This sounds dark and gloomy, but there is a lot of good coming with the end of the moratorium, as well. Because the market is so hot right now, houses are selling extremely quickly. Homeowners selling in order to avoid foreclosure and the credit hit that comes along with it will likely get great terms and possibly even sell for a gain. Consequently, they'll retian their buying power for their next home instead of being displaced.

The additional houses coming on the market will also help increase inventory and balance pricing. So what does this mean for those NOT at risk of foreclosure? If you're considering selling within the next year or two, NOW is the time!

Prices are high and terms are great for sellers, plus interest rates are still low to give you buying power for your next home. Within the next 6 months, we'll be seeing an increase of houses coming on the market, providing a price correction and getting us closer to a balance of power between buyers and sellers. Because many of these will be distressed or forced sales, it will give buyers even more power. If you want more informatio on what this means to you as a seller AND as a buyer, never hesitate to reach out or to comment here for even more.