Nationwide, anywhere between a quarter to a half million homeowners could face foreclosure by the end of 2021 as a result of the pandemic, according to new projections from Attom Data Solutions.
Utah’s housing market, however, is in relatively good shape.
“It’s very different than what we had in 2008, 2009 with the great recession where housing took the brunt of that collapse,” said James Wood, Ivory-Boyer Senior Fellow at the Kem C. Gardner Policy Institute at the University of Utah.
In particular, Utah’s economy is faring better than most other states at the moment.
“Utah is now ranked second among all states and its unemployment rate is the second lowest only to Kentucky and an unemployment rate of 5.1%,” said Wood.
Utah’s housing market seems to be somewhat insulated, according to Wood.
“The demand is strong, interest rates are low, so prices have held up and I would expect that to be the case through the rest of the year,” said Wood.
The CARES Act also protects homeowners with a federally backed mortgage from facing foreclosure. If Congress doesn't act, the program expires at the end of August.
Even if the program does not get renewed, it would take some time to see a change in foreclosure rates.
“We’re not gonna see in September, October, November all of a sudden a huge spike in foreclosures,” said Wood.
Homeowners would still be able to hold off on payments for up to a year, which is called forbearance and the foreclosure process can take quite a while. At the moment, listings and sales in Utah are down said Wood.
“Some sellers have pulled their listings waiting for perhaps better times in six to eight months,” said Wood.
Lower sales are not due to lack of interest according to Wood and the situation is only increasing the state’s pre-existing housing shortage.