Housing crash doom porn remains the biggest problem in real estate.
This is because it is keeping millions of buyers out of the market.
The two biggest sources of doom porn as of late are: (1) Freddie Mac delinquencies; and (2) FHA delinquencies.
But both sets of data are ridiculously misleading and not even close to a threat.
I. OMG! Freddie Mac Mortgage Delinquencies Are Higher Than in 2008!
X is filled with posts screaming that 6 million people are behind on their mortgages! And then they post the below chart showing how mortgage delinquencies are spiking.
However, the chart is for multi-family delinquencies (for complexes with 5 or more units). The chart does not reflect single-family or 2- to 4-unit delinquencies.
I want to repeat that: The terrifying delinquency chart we see posted everywhere is for multi-family loans, not single-family mortgage loans.
Yes, it’s scary. But it’s scary for the banks holding those loans. It will not impact the single-family housing market.
OMG II: FHA Delinquencies Are Going to Crash the Housing Market!
The internet is also awash in doom porn regarding FHA mortgage delinquencies – and how the evil government (first Biden and now Trump, comically) is hiding them to prevent a housing crash.
But, as ”famed” housing analyst, Home Loan Bill, reminds us – only about 15% of all mortgages are FHA loans. And even if FHA delinquencies are at a whopping 13.5%, that is still only 2% of all mortgages.
Further, 40% of all homes have NO mortgages! So delinquent FHA loans only impact about 1% of all homes.
Logan Mohtashami also reminds us that 23% of all homes were underwater (with no equity) in 2008, while only 2% are now. Additionally, the average LTV in 2008 was 85%, whereas it is currently 46%.
Logan also reminds us that total listings in 2007 were over 4 million, compared to less than 1.3 million today (so, we’re hardly seeing historic inventory builds).
The best doom porn fighter of all though is probably the below chart which shows that total foreclosures are not even back to pre-pandemic levels.
