In the aftermath of the housing crisis, lenders and regulators clamped down hard to make sure we’d never have another bubble like the one that inflated in the middle of the last decade.
That’s led to a borrowing environment that many housing-market observers describe as too pristine, one absent normal fluctuations. And many have warned that with delinquencies and other housing distress at long-time lows, it can only get worse from here.
Or can it?
In May, the “foreclosure inventory rate,” or the percentage of homes currently in any stage of the foreclosure process, was at its lowest in over 20 years — for the sixth month in a row.
Overall delinquencies are also at the lowest since 1999, CoreLogic said, citing “a 50-year low in unemployment, rising home prices and responsible underwriting.”
Notably, that long-time low in all delinquencies comes alongside small local spikes in what’s called the “serious delinquency” rate, or loans that are more than 90 days past due. For example, one year past the massive California Camp Fire, serious delinquencies in the Chico, Calif., metro area jumped 21%.
That’s a small reminder of the housing market as it existed before the bubble inflated and then burst. All real estate is local, in part because natural disasters, microeconomies and municipal policies are particular to a region.