In March 2020 as part of the CARES ACT a moratorium on foreclosures on all federally backed loans in the USA due to the covid-19 pandemic. The moratorium was subsequently extended multiple times until its final expiration 17 months later in July 2021. August 2021 marked the return of most foreclosures.
the CT foreclosure market today
CT Foreclosed Inventory
Both sales of REO (foreclosed homes) and new REO listings started falling in March 2020 as the moratorium went into effect, dropping to nearly zero by mid 2021. August 2022 foreclosures returned to market, with continued monthly increases in new and sold REO listings.
CT Distress Sales
When looking back over a decade of CT distress sales (short sales and REO), the trend is even more distinct. The prior two years show a pretty steady 12% distress sale rate, which dropped to just 2% of market share by 2021. 2022 has just begun but the rise is significant already, just 2 months into the year.
What's up ahead for the rest of 2022?
Foreclosures are back! While foreclosures may now return to a "normal" rate, there is also an additional backlog of almost two years of halted foreclosures that will need to get through the system. This will mean much more distress inventory coming to market this year. This is great news for buyers as inventory has been sparse for several years. It is too soon to tell whether this additional inventory will be enough to ease demand and balance the current sellers market.
Last Updated on September 2, 2022 by Minna Reid