Alaska foreclosure rate nearing historic low
While Alaska's economy is inching toward the end of a recession, housing experts say we're living in a very different Alaska than that of the 1980s when the state saw a mass outward migration. The state housing market has remained relatively stable, despite the economic downturn that started in 2015.
"Our foreclosure rate is almost at a historical low at Alaska Housing," Bryan Butcher, executive director and CEO of the Alaska Housing Finance Corporation, told KTVA's Daybreak in a live interview Thursday. The corporation has about a 25% share in Alaska's overall market.
At the end of May, AHFC's foreclosure rate was less than one-quarter of 1%. "[The] lowest probably in the entire country," Butcher noted.
Data from the Department of Labor and Workforce Development shows a similar trend in foreclosures around the state.
So what sets this recession apart from the one three decades ago when Alaska Housing foreclosed on 15,000 homes?
Butcher suspects it's a combination of factors. One of them is notably low interest rates which may allow homeowners to refinance.
"They're under 4%," Butcher said. "The lower the interest rates the more of a house you can buy because you can afford the mortgage payment of a larger house because the interest rates are so low."
Another factor to consider, Butcher says, is the state's aging population which may be more rooted in Alaska.
"Now I think we're seeing a lot of retirees here, a lot of people put their roots in. When you have children here, you've got grandparents here and this is your home," Butcher said. "There's a lot more of an incentive to want to stay and make Alaska a home than it is if you've been here for five years, as an example."
While low interest rates have helped soften the sellers market in Alaska, Butcher notes that the Nov. 30 earthquake has added a layer of uncertainty with homeowners focusing on how the quake and subsequent aftershocks affected their homes.
"What we saw after the earthquake was kind of a slowing down of both sales and potentially purchases of housing," Butcher said.
AHFC offers free classes for prospective home buyers, both in person and online. For more information, visit the AHFC website.
Correction: An earlier version of this story stated the AHFC's mission is to provide affordable loans to public housing programs. According to its website AHFC's mission is to provide Alaskans access to safe, quality, affordable housing. It does not provide affordable loans.
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