Mortgage delinquencies across the country are significantly higher than they were last year, fueled by the rise in late payments over 90 days old amid the pandemic. More than half of 2.7 million active forbearance plans are set to end between March & June and may be extended by the Biden administration, according to mortgage-data firm Black Knight.

While early-stage delinquencies are still protected by government forbearance programs, those missed payments are cumulative, not forgiven, and will have to be paid sometime. This could have a lasting financial impact as homeowners struggle to catch up on missed payments that suddenly become due all at once when forbearance programs end.

We do NOT expect this to lead to a melt-down in the foothills housing market for three reasons:

• with the run-up in prices over the last few years, virtually all homeowners have equity. So even if someone can’t cover their missed payments, they can probably still sell for a profit, which will alleviate desperation-sales like we saw in 2008-2010
• we are currently experiencing an historic dearth of homes to buy--we need more than twice as many more listings before we even approach a balanced market, let alone a buyers’ market where listings outnumber buyers
• our unofficial survey of foothills homeowners indicates they have largely avoided forbearance programs because they have been able to at least make ends meet during the pandemic.

So if you read headlines about a mortgage ‘crisis’, it will almost certainly be located in cities, not suburbs, but it IS something we will keep our eyes on.