Housing: A Look Ahead to 2013
There’s a thought-provoking article posted on TIME magazine’s website that takes a look at how the housing market fared in 2012. It also details what some of the critical market indicators are suggesting may be ahead in 2013.
In his piece, reporter Christopher Matthews argues that recent housing sector improvements, such as the rise in home prices and decline in foreclosure activity, will not result in a meaningful recovery unless unemployment drops or wages increase. His insights match what we hear every day first hand from the people who call our Homeowner’s HOPE Hotline at 888-995-HOPE. Rare indeed is the struggling homeowner who is behind on his or her mortgage, but current with all the other average household debts, such as car loans, utility bills, student loans, and the like. Unemployment, underemployment, unexpected medical bills…. any of these life challenges could significantly change someone’s ability to stay afloat – and can do so practically overnight. Accordingly, homeowners who are current with their payments today but are living off their savings or are making ends meet paycheck-to-paycheck could easily join the millions now facing foreclosure if their funds dry up.
Our view on what’s ahead? First, that the threat of foreclosure will remain a harsh reality for millions of American homeowners. While the crisis may be abating nationally, it is far from over. While we expect to receive calls to our HPF HOPE Hotline from thousands of homeowners every week, we know that many more will not reach out for foreclosure prevention guidance, either to HPF housing counselors or their bank. These hard-to-reach homeowners often struggle alone to remedy their challenges out of a sense of hopelessness, fear, indecision, lack of trust, embarrassment or some combination of all these and other emotional and attitudinal triggers. HPF will continue to work aggressively in the year ahead to try to connect with these homeowners and help them see that foreclosure is not the only option.
Also, as previously reported, we’ve seen a dramatic increase in calls from homeowners who are current on their mortgages but are in danger of default; we expect that trend to continue in 2013. More and more homeowners are calling to speak to our housing counselors before they get behind on their payments. Our counselors have helped untold numbers of homeowners hold onto their homes by taking a broader view of their financial picture and making meaningful changes in their spending habits to follow more realistic budgets. We expect that this already- underserved need among concerned homeowners for such reliable, holistic one-on-one financial counseling that’s available at their convenience to grow in 2013.
FYI: Those interested in learning more about what may be ahead for housing may be interested in a recap of a five-part series of 2013 housing predictions in the Wall Street Journal; it notes that the housing market remains fragile due to the number of underwater borrowers, but also predicts that the “shadow” inventory will continue to shrink and that credit-lending standards will remain tight in 2013.
Wishing you all a happy, healthy, and financially stable 2013.