In 2010, foreclosure rates peaked amid what became known as the “foreclosure crisis.” The housing bubble, foreclosures, and mortgage-backed assets devalued due to subprime mortgage delinquencies. Since then, U.S. foreclosure rates have fallen. After the COVID-19 pandemic, thousands of individuals lost their jobs and couldn’t pay their mortgages, threatening another foreclosure wave.
The government instituted a foreclosure moratorium, a mortgage forbearance program for federally backed loans, and new mortgage servicing legislation. 2020 and 2021 foreclosures were modest. In 2022, foreclosure rates increased and are predicted to rise further in 2023. High-interest rates could bring more foreclosures in 2023. As some homeowners default on their mortgages, housing inventory will rise in 2023. Homes will also spend more time on the market, resulting in an increase in overall housing inventory.
ATTOM, a leading curator of real estate data nationwide for land and property data, released its Year-End 2022 U.S. Foreclosure Market Report, which shows foreclosure filings— default notices, scheduled auctions, and bank repossessions — were reported on 324,237 U.S. properties in 2022, up 115 percent from 2021 but down 34 percent from 2019 before the pandemic shook up the market. Foreclosure filings in 2022 were also down 89 percent from a peak of nearly 2.9 million in 2010.
Those 324,237 properties with foreclosure filings in 2022 represented 0.23 percent of all U.S. housing units, up slightly from 0.11 percent in 2021, but down from 0.36 percent in 2019 and down from a peak of 2.23 percent in 2010.
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“Eighteen months after the end of the government’s foreclosure moratorium, and with less than five percent of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the COVID-19 pandemic,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures.”
ATTOM’s year-end foreclosure report also includes new data for December 2022, showing there were 30,822 U.S. properties with foreclosure filings, up less than 1 percent from the previous month but up 72 percent from a year ago.
Lenders repossessed 42,854 properties through foreclosures (REO) in 2022, up 67 percent from 2021.
It was down 70 percent from 2019 (143,955) and down 96 percent from a peak of 1,050,500 in 2010.
States that saw the greatest number of REOs in 2022 included Illinois (5,518 REOs); Michigan (3,669 REOs); Pennsylvania (2,741 REOs); New York (2,405 REOs); and California (2,223 REOs).
Housing Foreclosure Stats in the United States for 2023
The housing market is a critical component of the US economy, and foreclosure statistics play a crucial role in determining its health. ATTOM, a leading curator of real estate data nationwide, recently released its February 2023 U.S. Foreclosure Market Report. The report analyzes foreclosure filings, default notices, scheduled auctions, and bank repossessions for the month of February 2023, comparing them with previous years. This article provides a detailed analysis of the report’s findings and what they mean for the US housing market.
Foreclosure Completion Numbers Increase 45 Percent From Last Year
The report indicates that lenders repossessed 3,831 US properties through completed foreclosures (REOs) in February 2023. This figure represents a 2% dip from last month but a 45% increase from last year. The states that saw the greatest annual increase in completed foreclosures in February 2023 included New York (up 268%), Georgia (up 237%), California (up 132%), Texas (up 87%), and Virginia (up 73%).
Among metropolitan statistical areas (MSAs) with a population greater than 200,000, the top five that saw the greatest number of completed foreclosures (REOs) in February 2023 were Chicago, IL (193 REOs), New York, NY (170 REOs), Detroit, MI (112 REOs), Philadelphia, PA (104 REOs), and St. Louis, MO (97 REOs).
Foreclosure Starts Decrease Monthly in 25 States Including the District of Colombia
The report states that lenders started the foreclosure process on 20,360 US properties in February 2023. This figure represents a 2% decrease from last month but a 23% increase from last year. The states with the highest numbers of foreclosure starts in February 2023 were Texas (2,187 foreclosure starts), California (2,133 foreclosure starts), Florida (1,831 foreclosure starts), New York (1,318 foreclosure starts), and Illinois (1,170 foreclosure starts).
Among metropolitan statistical areas (MSAs) with a population greater than 200,000, the top five with the highest numbers of foreclosure starts in February 2023 were New York, NY (1,554 foreclosure starts), Chicago, IL (1,034 foreclosure starts), Los Angeles, CA (710 foreclosure starts), Houston, TX (699 foreclosure starts), and Philadelphia, PA (565 foreclosure starts).
Highest Foreclosure Rates in New Jersey, Maryland, and Illinois
The report shows that one in every 4,574 housing units had a foreclosure filing in February 2023. The states with the highest foreclosure rates were New Jersey (one in every 2,271 housing units with a foreclosure filing), Maryland (one in every 2,390 housing units), Illinois (one in every 2,443 housing units), Nevada (one in every 2,854 housing units), and Indiana (one in every 2,956 housing units).
Among metropolitan statistical areas (MSAs) with a population greater than 200,000, the top five with the highest foreclosure rates in February 2023 were Fayetteville, NC (one in every 1,627 housing units with a foreclosure filing), Atlantic City, NJ (one in every 1,708 housing units), Florence, SC (one in every 1,833 housing units), Jacksonville, NC (one in every 1,934 housing units), and Cleveland, OH (one in every 2,049 housing units).
Among metropolitan areas with a population greater than 1 million, those with the worst foreclosure rates in February 2023 included Chicago, IL (one in every 2,300 housing units), Las Vegas, NV (one in every 2,706 housing units), Baltimore, MD (one in every 2,748 housing units), Cleveland, OH (one in every 2,828 housing units), and Indianapolis, IN (one in every 2,851 housing units).
Implications for the US Housing Market
The increase in completed foreclosures and foreclosure starts in February 2023 could suggest that the US housing market is beginning to experience some turbulence. The rise in completed foreclosures could be due to several factors, such as job losses, increasing interest rates, and rising home prices, which could make it difficult for some homeowners to make their mortgage payments.
The decrease in foreclosure starts in 25 states, on the other hand, could indicate that some homeowners are taking advantage of forbearance and other relief programs offered by lenders and the government. These programs provide temporary relief to homeowners who are struggling to make their mortgage payments due to COVID-19-related financial hardships.
The states with the highest foreclosure rates, such as New Jersey, Maryland, and Illinois, may experience a significant impact on their housing markets. High foreclosure rates could lead to an oversupply of housing inventory, which could lead to a drop in home prices. The states with the highest numbers of completed foreclosures, such as New York, Georgia, and California, could also experience similar impacts.
Overall, the February 2023 U.S. Foreclosure Market Report highlights the importance of monitoring foreclosure trends in the US housing market. While the increase in completed foreclosures and foreclosure starts may be concerning, it is essential to note that the housing market is still relatively stable, and there are relief programs available to help struggling homeowners. It will be crucial to monitor the market’s performance in the coming months to determine if these trends continue or if they are just temporary fluctuations.
Top 10 ZIPS with Highest Foreclosure Rates in the US
ATTOM’s 2022 year-end foreclosure report also uncovered the top 10 zip codes with the highest foreclosure rates in 2022. Among those zips with 10,000 or more housing units, those with the highest foreclosure rates included the following.
44108 in Cleveland, OH (2.54 percent of housing units with a foreclosure filing)
44112 in Cleveland, OH (2.38 percent); 44105 in Cleveland, OH (2.14 percent)
44110 in Cleveland, OH (2.00 percent)
44137 in Maple Heights, OH (1.93 percent)
8046 in Willingboro, NJ (1.91 percent)
60628 in Chicago, IL (1.86 percent)
44128 in Cleveland, OH (1.71 percent)
44103 in Cleveland, OH (1.58 percent)
44104 in Cleveland, OH (1.58 percent)
Source: ATTOM
Sources:
https://www.attomdata.com/news/market-trends/foreclosures/attom-february-2023-u-s-foreclosure-market-report/
https://www.attomdata.com/news/market-trends/foreclosures/attom-year-end-2022-u-s-foreclosure-market-report/
https://www.attomdata.com/news/market-trends/figuresfriday/top-10-zips-with-highest-foreclosure-rates-in-2022/
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