Lately, there has been a lot of buzz about whether foreclosures could rise in the housing market. For homeowners and buyers in Richmond, Chesterfield, Henrico, and the surrounding areas, it is natural to wonder what this means for the future of real estate locally.

The good news is the data gives us a clear picture, and it shows that while delinquencies have ticked up slightly, foreclosure risk remains historically low. Let’s break down what the numbers reveal.

Mortgage Delinquencies Are Still Low

When a homeowner misses a payment, it is called a delinquency. Historically, a rise in delinquencies has sometimes signaled more foreclosures. But today’s data tells a much more encouraging story.

As you can see, delinquency levels today remain far below historical averages. Even with a slight increase compared to the unusual lows during the pandemic, we are nowhere near the danger zones that caused major foreclosure issues in the past.

This means that most homeowners are still in a strong position to make payments, protect their equity, and avoid foreclosure.

Why Foreclosures Are Unlikely to Spike

Another important factor is that homeowners today have built significant equity in their homes thanks to strong price appreciation over the last several years. This equity acts as a cushion, giving homeowners more options such as selling before foreclosure becomes necessary.

Additionally, lending standards have been tighter compared to the pre 2008 era, meaning buyers entering the market today are financially stronger and less likely to default.

As the Federal Reserve Bank of New York explains:

“Looking at geographic concentrations of loans, recent data indicate that a higher proportion of mortgage balances are delinquent in many of the southern states . . . we see that higher delinquency rates coincide with a higher share of FHA loans across states.”

The Region with the Most FHA Loans

Here’s another reason this isn’t a signal of trouble ahead. FHA loans only make up about 12% of all home loans nationwide. But like anything else in housing, local data matters. There are some regions of the country where there are more of this type of loan than others, particularly the South.

The map below does not show how many FHA loans are delinquent. It just shows the overall concentration of FHA loans by state, so you can see which regions have the greatest volume (see map below):

As the Federal Reserve Bank of New York explains:

“Looking at geographic concentrations of loans, recent data indicate that a higher proportion of mortgage balances are delinquent in many of the southern states . . . we see that higher delinquency rates coincide with a higher share of FHA loans across states.”

Just remember, even the delinquencies rates we’re seeing now aren’t as high as they were in 2008. Again, this is not a signal of a crisis. But it is something experts will monitor in the months ahead. 

What This Means for Buyers and Sellers in Central Virginia

For buyers, this means the housing market is not at risk of a foreclosure flood that would drive prices down. Home values in Richmond, Chesterfield, Henrico, and nearby communities remain supported by strong fundamentals.

For sellers, this stability is good news. Even with shifting conditions, your home’s equity is protected, and demand for well priced homes is still strong.

At Don Reid Properties, we help you understand local housing trends so you can make the best decisions whether you are buying, selling, or investing.

Key Takeaway

While mortgage delinquencies have inched up from record lows, foreclosure activity remains minimal and Virginia homeowners are in a strong position. History shows us that equity and stronger lending practices are keeping the market stable, and the outlook for Richmond and the surrounding areas is steady.

💡 Thinking about buying or selling in this market? Let’s put a plan together that works for you.

📞 Call Don Reid Properties at (804) 929-4475 or 📅 schedule a consultation