I recently received a question via Instagram on the subject of home foreclosures in 2015. The person wanted to know if there would be a trend and if it would specifically impact seniors. I compared what I have been seeing in the market alongside some of the notes of my peers and here is what I expect to happen in 2015;
I am of the believe that a series of temporary relief measures and legacy issues from the crisis will begin surface in 2015, causing home repossessions that could present economic headwinds. Now, I don’t expect this to hit the senior housing demographic directly. Instead, I see new homeowners in their early thirties being the main victims of this crisis. This said, it you’re a senior who is looking to sell his or her home- not would be the idea time.
Once certain groups of people start getting hit with relief measures and legacy issues, leading to foreclosures, the entire home buying demographic tends to take three steps back and will hold off until the trend dies down. As I writing this blog post, I did some checking on the numbers to back up my thoughts on trends I am starting to see.
TransUnion, the credit rating firm, estimates that between $50 and $79 billion in home-equity loans risk default because of the increased payments, which could add hundreds or even thousands of dollars to payments a month. Additionally, the government’s Home Affordable Modification Program (HAMP) provided only temporary interest rate relief to borrowers, and after five years, that relief runs out, with interest rates gradually rising about 1 percent each year. Over 319,000 of these rate resets begin in 2015, according to a report from the Special Inspector General of the Troubled Asset Relief Program (TARP).
So yes, I do believe we will see a temporary spike in home foreclosures during 2015 but only for a certain sector of present homeowners. Overall, especially in Northern California, I expect the housing market to continue and climb.