Financing Trends & Foreclosure Reality - Insights From Dave & Travis

by David Johnson

With spring approaching, many people start thinking about buying or selling a home. One of the questions we hear often is how buyers are actually financing homes in today’s market.

Are most buyers paying cash? 

Are interest rates stopping people from buying? 

Or are buyers still using traditional financing?

We recently reviewed March home sales across the Mat-Su Valley and Anchorage residential markets, and the financing breakdown between 2019, 2023, and 2026 tells a very interesting story about how buyers are adapting to today’s market.

Conventional Loans Continue to Lead the Market
Across all three years, conventional financing remains the most common way buyers purchase homes.

In Mat-Su, conventional loans represented: 

• 31% of purchases in 2019 

• 34% in 2023 

• about 28% in 2026

In Anchorage, the numbers are even higher: 

• 45% in 2019 

• 54% in 2023 

• about 49% in 2026

What this shows is that even with changing interest rates, traditional financing continues to be the primary path for buyers entering the market.

VA Loans Are Still a Major Part of Alaska Real Estate
Because of Alaska’s strong military presence, VA loans continue to play a big role in home purchases.

In Mat-Su, VA loans made up: 

• 21% of purchases in 2019 

• 36% in 2023

 • about 28% in 2026
In Anchorage, VA loans accounted for: 

• about 12% in 2019 

• 13% in 2023 

• about 20% in 2026

VA financing remains one of the most powerful loan options available because of low down payments and flexible qualifying guidelines.

Cash Buyers Are Still Active
Despite financing options being widely used, cash purchases remain steady in the market.

In Mat-Su, cash purchases represented: 

• 8% in 2019 

• 11% in 2023 

• about 13% in 2026
In Anchorage, cash purchases were: 

• about 8% in 2019

 • 14% in 2023

 • about 9% in 2026

These buyers are often investors, relocations, or homeowners who sold another property before purchasing.

FHA and AHFC Continue Helping Buyers Enter the Market
Programs like FHA and Alaska Housing Finance Corporation (AHFC) continue to provide opportunities for buyers who may not have large down payments.

These loan programs have remained fairly consistent over the years and continue to help first-time buyers and families move into homeownership.

What This Means for Buyers Today
The biggest takeaway from this data is simple:
Buyers are still finding ways to purchase homes in Alaska. Even with interest rate changes and shifting market conditions, people continue to buy homes using a variety of financing options. Many buyers assume they need 20% down or perfect conditions to buy, but that’s often not the case.

There are more financing options available today than most people realize.

Curious What You Could Qualify For?
If you’ve been thinking about buying but aren’t sure what your options might look like, we’re always happy to help point you in the right direction.

We work closely with some excellent Alaska lenders who can walk you through the programs available and help you understand what might work best for your situation.

No pressure. Just good information.

Get Pre-Approved with Our Trusted Lender

One Key Sign We’re Not Headed for a Wave of Foreclosures

Foreclosures are ticking up. And that may make your mind jump straight to thoughts of 2008, specifically to what happened to the market during the housing crash. So, let’s do exactly what your brain already wants to do, and see if there’s any connection there.

The simple truth is foreclosure filings are rising. But they’re nowhere near crisis levels. And that’s not where they’re headed either. Here’s why.

Take a look at serious delinquencies loans where the homeowner is more than 90 days late on their mortgage payments.

While those have increased slightly, data from the New York Fed shows they still remain low. And they aren’t anywhere close to levels seen when the market crashed (see graph below):

Right now, about 1% of mortgages are seriously delinquent. That’s only 1 in 100.
In the years around the crash, they were up around 9%. That’s 1 in 11.
That’s a big difference.

And it’s important to remember not all delinquencies even become foreclosure filings. Some homeowners who are falling behind will work out repayment plans with their banks and lenders because banks don’t want to see a wave of foreclosures either.

That’s why foreclosure numbers are even lower than delinquencies. ATTOM shows only 0.3% of all homes are currently going through a foreclosure filing. And those won’t even all go to a full foreclosure. That’s not a wave. That’s a ripple at most.

If People Are Falling Behind on Payments, Why Aren’t There Even More Foreclosures?
And maybe you’re wondering, if people are struggling financially, why aren’t there more foreclosures? Here’s the easiest way to answer that.

When households feel financial pressure, they tend to prioritize their mortgage payment above almost everything else. Because the last thing they want to lose is their home.

Data from the New York Fed shows serious delinquencies have risen more for credit cards and auto loans (the blue and green lines). But mortgage delinquencies and home equity lines of credit (borrowing against the value of your home) aren’t seeing the same big uptick (the yellow and orange lines). They’re a lot more stable overall.

In other words, people may fall behind on other debts, but they fight hard to keep their homes. And, in today’s housing market, they’re also in a strong equity position to do so.

Home Equity Changes Everything
Many people have built significant equity over the past several years. And that creates options. As Daren Blomquist, VP of Market Economics at Auction.com, explains:

“Distressed homeowners… many times they still have equity in their homes. There’s an opportunity for them to sell that home, avoid foreclosure, and walk away with equity.”
That’s a major difference from 2008. Back then, many homeowners owed more than their homes were worth. And selling wasn’t an easy solution. Today, for many people, it is. And even in situations where equity isn’t enough, homeowners are encouraged to contact their loan servicer early to explore alternatives to foreclosure.

Bottom Line
Are foreclosure filings rising slightly? Yes. Are they anywhere near crash territory? No. And homeowners today have far more equity and flexibility than they did during the crash.

If you’re concerned about what you’re seeing in the headlines, the best move isn’t panic, it’s perspective. And the data right now says this isn’t 2008 all over again.

Ask Me About Your Home's Value

Whether you're buying, selling, or just planning ahead, now’s a great time to chat about your options — I’m here if you need a strategy that fits your goals!

LET US BE YOUR TRUSTED GUIDE

Call or text Dave now at 907-863-7289
Call or text Travis now at 907-575-6779

davesalaskahomes@gmail.com

http://www.DavesAlaskaHomes. com

Financing Trends & Foreclosure Reality - Insights From Dave & Travis

by David Johnson

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