Secret #35 – When House Prices Go Up, Foreclosures Go Down
Higher house prices mean a higher percentage of financially distressed home owners can sell their houses and make money so fewer of them go into foreclosure.
It could be house prices increased because of economic fundamentals;
A decrease in mortgage rates,
A decrease in mortgage lending standards and an increase in mortgage money available to buyers,
An increase in area income due to a growing economy,
An increase in area population,
An increase in investor demand for any reason, or
Just because prices have been increasing for a few years and people now expect prices to continue increasing for a few more years which increases current demand, or
For whatever other reasons, known and unknown.
It doesn’t matter why house prices increased, only that they increased, and when they do, foreclosures fall.
In addition to increasing home owner equity, when house prices are increasing it often means the economy is also growing which means fewer home owners are losing their jobs and having that type of financial distress in the first place.