Effect of the Government’s Foreclosure Avoidance Programs on the Housing Market
Filed under: Real Estate Market
We are seeing changes in foreclosures, especially as state and federal governments are putting more protections in place to reduce the likelihood of homeowners losing their properties in foreclosure. Recently, there has been some talk about the government’s foreclosure avoidance programs and whether these policies will be beneficial for the market as a whole.
How do these patterns impact the market overall? We already know that the real estate market is tight, and it’s clear that inventory will still be a challenge – especially when there are protections for foreclosed homes.
Looking at the Bigger Picture
The big picture is that these programs are more tools the government is bringing out to help avoid foreclosure. I think it is going to be a trend that continues. They are going to keep bringing out products to help homeowners avoid foreclosure – which is going to have positive and negative effects.
- The positive effect is that it helps families stay in their homes and get through a tough period, instead of having them foreclose – which is a phenomenal thing.
- The downside is: in an already tight inventory market, homes that would hit the market for these types of reasons won’t be available for sale.
So, what it does inadvertently is that it makes it a little more of a seller’s market. It puts the edge in the seller’s court. As a result, it becomes even harder for home buyers to find inventory.
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