President Joe Biden on Tuesday extended the ban on home foreclosures for federally backed mortgages until June 30, 2021. This is the second extension of the ban which was originally set to expire January 31, 2021, but then previously extended by President Biden to March 31, 2021.
Meanwhile, as the chart below shows, serious delinquencies on home mortgages have been on the rise since nearly the beginning of the pandemic almost a year ago. The ban on foreclosures is certainly a welcome relief to those struggling to make their house payments. However, with such a high delinquency rate one has to wonder if it is just delaying the inevitable and that this is sort of a ticking time bomb for the real estate market? I say that because with the number of mortgage delinquencies piling up it is safe to assume that once the ban is over there will be a massive amount of foreclosures hitting the market which may very well have a negative impact on the market.
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