Short answer. The CARES Act foreclosure moratorium and forbearance programs cut the U.S. foreclosure rate to ~0.16% in 2021 — the lowest reading on record. Rates remained suppressed through 2022 and have only partially normalized since.
The CARES Act of March 2020 created the largest foreclosure intervention in U.S. history. Federal-backed loans (Fannie Mae, Freddie Mac, FHA, VA) were prohibited from initiating foreclosure proceedings, and homeowners could request forbearance — pausing payments without immediate foreclosure consequence — for up to 18 months. Roughly 9 million U.S. mortgages entered some form of forbearance during 2020–2021.
The collapse in foreclosure activity
Foreclosure filings, ATTOM data:
- 2019: 0.36% of housing units (~493K filings) — pre-pandemic baseline
- 2020: 0.16% (~214K filings) — moratorium kicks in mid-year
- 2021: 0.11% (~151K filings) — record low
- 2022: 0.23% (~324K) — moratorium fully expired
- 2023: 0.26% (~357K)
- 2024: ~0.30% (~410K) — gradual normalization
The 2021 reading is the lowest annual foreclosure rate in the modern record by a meaningful margin. The previous low had been roughly 0.34% in 2019.
Why the moratorium worked
The COVID intervention was structurally different from any prior foreclosure relief program:
- Speed. Forbearance applications could be submitted and approved within days, rather than the months-long modification negotiations that characterized 2009–2012 HAMP processes.
- Scale. 9M households accessing relief is roughly 4× the peak 2010 modification volume.
- Underlying labor market. Unlike 2008–2010, the 2020 employment shock reversed quickly. Most forbearance recipients were back at work within 6–9 months and able to resume payments.
- Home equity. Most 2020 borrowers had positive equity that the 2009 cohort lacked. Even forbearance failures could be resolved through sale rather than foreclosure.
The post-moratorium normalization
The moratorium expired in mid-2021, but foreclosure activity has only gradually returned to the pre-pandemic baseline. The 2024 reading remains roughly 17% below 2019 levels. Three factors have kept post-moratorium rates suppressed: (1) home-price appreciation gave most distressed borrowers an exit through sale rather than foreclosure; (2) labor markets remained tight through 2023 and 2024; (3) servicer modification programs absorbed many of the cases that would otherwise have advanced to foreclosure.
Related
- Foreclosure rate history dashboard
- Q&A — Worst year for U.S. foreclosures
- Q&A — States with highest foreclosure rates
- Q&A — U.S. housing market in 2020
- The COVID Housing Surge, 2020–2024
Sources
U.S. Census Bureau Survey of Construction; National Association of Realtors Existing Home Sales report; Freddie Mac Primary Mortgage Market Survey; National Bureau of Economic Research Business Cycle Dating Committee.