When their finances took a hit during the pandemic, millions of U.S. homeowners, including thousands in Colorado, took advantage of a government program that provided them a reprieve from mortgage payments. The clock is running out on those forbearance agreements, however, a large majority of homeowners who sought relief have exited and are back on track with their payments.

During a panel discussion hosted by the National Association of Real Estate Editors, Michael Fratantoni, chief economist at the Mortgage Bankers Association said that most borrowers, even though they had the ability to skip payments, kept paying. That makes it unlikely a surge in distressed sales and foreclosures will roil the markets in the months ahead.

According to Rick Sharga, an executive vice president with RealtyTrac, there will be somewhere around 180,000 mortgages in foreclosures this year. Before the pandemic, foreclosures were averaging closer to 500,000 a year. Experts predict that while foreclosures may rise sharply in the months ahead on a percentage basis, it will be from a very low base.

A big reason foreclosures won’t swamp the market is that many borrowers have enough equity in their homes to sell and move on, even if that isn’t their preferred course. And buyers are waiting to snap up any that do show up.

In Colorado, only 2% of homeowners are seriously underwater on their loans and 93% have positive equity, according to RealtyTrac. If you’re looking to become a homeowner but were waiting on an influx of distressed properties to reduce your budget or increase your options, you may want to reconsider. The climate in Denver doesn’t show many signs of cooling, and demand continues to grow. It’s unlikely that prices will decline any time soon, so now could be the perfect time to see what’s available. Give Metrowest a shout – we’d love to help you start the process!