The number of foreclosure starts — which is when the first public foreclosure notice happens — is up 219% since the start of the year, according to real estate data analytics firm ATTOM Data Solutions’ midyear 2022 U.S. foreclosure market report. What’s more, the number of properties that had foreclosure filings (this number includes foreclosure starts) is up 153% from the same time period last year.
Fully 96% of major metro areas saw an annual increase in foreclosure filings, with foreclosure rates highest in Illinois, New Jersey and Ohio. And when it comes to the number of foreclosure starts, California topped the list, followed by Florida, Tennessee, Illinois and Ohio.
“Foreclosure activity across the United States continued its slow, steady climb back to pre-pandemic levels in the first half of 2022,” says Rick Sharga, executive vice president of market intelligence at ATTOM. “While overall foreclosure activity is still running significantly below historic averages, the dramatic increase in foreclosure starts suggests that we may be back to normal levels by sometime in early 2023,” says Sharga. (See the lowest mortgage rates you can get here.)
What does this uptick in foreclosures mean for the housing market?
Foreclosures are shooting up as the various foreclosure moratoriums that kept people in their homes during the worst of the pandemic’s economic disruptions have now ended, explains Danielle Hale, chief economist at Realtor.com. That said, they are shooting up from extremely low levels, she adds — noting that even after the sharp increase in foreclosure activity observed in the first half of 2022, we’re still not back to 2019’s low pre-pandemic mid-year total.
“Much like the sharp turnaround in housing inventory that we’ve observed in the number of for-sale homes recently, when the market has tilted in one direction very extremely, we see huge percentage increases when the trends shift back in a different direction, even though in many aspects what we’re witnessing is just a return to something resembling what was once normal,” says Hale.
Indeed, “it’s important to note that many of the foreclosure starts we’re seeing today — in fact, much of the overall foreclosure activity we’re seeing right now is on loans that were either already in foreclosure or were more than 120 days delinquent prior to the pandemic,” says Sharga. Indeed, many of these loans were protected by the foreclosure moratorium put in place by the government during the pandemic — therefore just halting the inevitable by a couple of years. Greg McBride, chief financial analyst at Bankrate says, “Foreclosure activity is returning to normal levels after being artificially depressed by pandemic-induced payment relief programs and extended foreclosure moratoriums. In a historical context, foreclosures are still very low.”
And while these foreclosure numbers sound dramatic, Holden Lewis, home and mortgage expert at NerdWallet, says it’s not enough to make a dent in the housing market or the overall economy. “Even a healthy housing market has foreclosures, and this pace is nothing to worry about,” says Lewis.
What does this mean for buyers?
While foreclosures remain unfortunate for the owners of those homes, for shoppers who have been frustrated by the lack of homes for sale in their budget, the increase in foreclosures could bring additional options, says Hale. “But much like the increases we see in for-sale housing inventory, it’s just the first step. We would need to see many more months of these increases before home shoppers will feel like they have an abundance of homes to choose from,” says Hale. source without paywall: https://12ft.io/proxy?q=https%3A%2F%2Fwww.marketwatch.com%2Fpicks%2Fdramatic-increase-foreclosure-filings-are-up-more-than-150-heres-what-that-tells-us-about-the-housing-market-01659181360
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I am an Account Resolution Specialist at Wells Fargo Home Mortgage. (Mortgage collector) . Loans in foreclosure include those that fell past due after covid forbearance. They realize after signing new 40 year mortgages post covid forbearance that there is no way out. Some even owe uncle Sam alot of fucking money for partial claims ( loan amounts that customers stop paying in covid) up to 18 months of payments they owe the government now. It’s nasty my friends.
It’s sad that I need 30% of homeowners to lose their jobs and foreclose on their homes if I’m ever to afford a house.
Insert “foreclosures are transitory” or “some foreclosure are a sign of a healthy housing market”
> “Foreclosure activity is returning to normal levels after being artificially depressed by pandemic-induced payment relief programs and extended foreclosure moratoriums. In a historical context, foreclosures are still very low.”
We’ll know it is bad when the politicians start agitating for government to “do something”.
>This is good news for the economy. Rich people like me will buy up all the foreclosed homes and turn them into investment properties, making even more money off of other people’s misfortune. I love it when poor people lose their homes, it just makes me feel so superior.
im in chicago suburbs and know 7 people who were shooting their mouths off back in 2017 that are living rent free because their houses are undergoing foreclosure … illinois sucks
What are the actual counts? Percentages don’t mean shit…300% increase sounds scary, but not if there was 50 foreclosures for the entire country. Maybe one of the links has that info, I’m just too lazy to look lol. I also don’t know why anyone thinks there’s gonna be a crash even close to 2008…today looks nothing like it did then. Correction – yes…crash? – no
Story is from July?
You’re looking at YoY foreclosure numbers from a time there was a foreclosure moratorium. I don’t don’t think that’s a very good metric big dawg. I expect housing to come down a bit but not because foreclosures went from 3 to 7.
I work in foreclosure there has definitely been an uptick in referrals and the amount of work we are doing in a day. We are also being asked to help with other departments within foreclosure which tells me that hiring is going to ramp up soon as we don’t have enough staff to cover all the work in a day.
I wonder if it has to do with BOA loans? “Bank of America launches zero down payment mortgages to help minorities buy their first homes”
Nothingburger.
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Sometimes I really wish I was wrong about things like this. It’s just so damn easy to see it coming from miles and miles away. This isn’t even going to be the shocking part of all this. Just wait till the real surprise hits, And makes 2008 look like a tiny correction
When you say “up 150%”, you mean from what? 0.04%? We’re back at pre-pandemic levels.
You’re going by percentage increases which is by itself pretty useless information
Foreclosure rate in 1933: 1.33%
Foreclosure rate in 2008: 1.8%
Foreclosure rate in 2021: 0.11%
Implied foreclosure rate in 2022: over 0.265%
That said you should get out of stocks anyway because corporate debt costs more than what their P/E ratios show they’re making, or, soon, what they think they’re going to make. Hurry up so I can get good deals on them later.
As for those small businesses not being able to pay their rents and can’t afford to pay employees $15 an hour and don’t want to do the work themselves, well, there’s a McDank’s application waiting for you, so you can get a real job like the rest of us have to. While you still can.