Mortgage Forbearance and the Long Beach Island NJ Real Estate Market

High Tides Digital Marketing
Oct 17, 2021
3 min read

What Does the End of Mortgage Forbearance Mean for the LBI NJ Real Estate Market

Long Beach Island Real Estate

One of the many changes to the real estate market as a result of COVID was mortgage forbearance. To recap, there was a temporary pause on some homeowners having to pay their monthly mortgage payments. The thinking behind this program was to give homeowners some breathing room during the height of the pandemic. A little over 7 million homeowners took advantage of the program. As the economy has recovered, most of these homeowners have left the program, but there are still over 1.5 million enrolled. With the end of the mortgage forbearance program, many buyers and sellers are left to wonder what impact this will have on the LBI real estate market and the national real estate market. My prediction? It will have little to no effect whatsoever.

Mortgage Forbearance and the Long Beach Island NJ Real Estate Market

There are a few reasons I do not feel the end of the forbearance program will impact the Long Beach Island real estate market or the national market:

Compared to the number of households in America, the number of homeowners in forbearance is small
Most homeowners have massive equity positions, so most would not be in a foreclosure situation even if they sold
Inventory is very low nationally and locally in the LBI real estate market

The Long Beach Island real estate market has never had many distressed sales. Most homeowners on LBI are in an excellent financial position and, therefore, have scant need of the forbearance program. On a very local level, it is unlikely there will be any real impact from the end of the program. The outlook for the national real estate market is strong. While it is strong, the LBI real estate market does not operate in a void. If the national real estate market were to break down, prices on Long Beach Island would fall as well. That seems unlikely given that compared to the number of homeowners in America, so few are involved with the program. Not all of these homeowners will fall on hard times, so it is unlikely that the market will be flooded with home sales. For those who do sell, it is almost certain that their home is worth more today than when they bought it. Therefore, if they sold, they should profit and not be in a distressed sale. With inventory being so low, even if more homes enter the market, they would be absorbed by the high levels of demand.

What Does the End of Mortgage Forbearance Mean for the LBI NJ Real Estate Market

Overall, it seems doubtful that the Long Beach Island NJ real estate market will be significantly impacted by the end of the mortgage forbearance program. It is even less likely that the Long Beach Island real estate market will see any meaningful impact. The real estate market is strong locally on Long Beach Island and nationally, and demand is very high. If you have any questions about buying, selling or investing in the LBI real estate market, please do not hesitate to contact me.