Executive Vice President at RealtyTrac, the leading source of distressed property data for investors and real estate professionals.
Historically, there’s been a strong correlation between unemployment and foreclosures. Job loss typically results in mortgage delinquencies – which ultimately lead to foreclosures. Given the number of jobs lost during the Covid-19 pandemic, many people may be expecting to see foreclosure activity reach – or even surpass – the record levels seen during the Great Recession.
But this recession is different from prior ones, and there’s strong evidence that suggests that the level of foreclosure activity it causes may be different as well.
Won’t Record Unemployment Lead To Record Levels Of Default?
The Covid-19 recession was unprecedented in its speed and severity, as the government issued shelter-in-place orders in an attempt to slow down the spread of the disease. Unemployment rates skyrocketed, and nearly 50 million Americans have filed for