Foreclosure Filings Down 83% From Their Peak

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The Year-End 2019 U.S. Foreclosure Market Report from ATTOM Data Solutions shows that foreclosure filings – default notices, scheduled auctions and bank repossessions – were reported on 493,066 U.S. properties in 2019, down 21% from 2018 and down 83% from a peak of nearly 2.9 million in 2010, to the lowest level since tracking began in 2005.

Those 493,066 properties with foreclosure filings in 2019 represented 0.36% of all U.S. housing units, down from 0.47% in 2018 and down from a peak of 2.23% in 2010.

“The continued decline in distressed properties is one of many signs pointing to a much-improved housing market compared to the bad old days of the Great Recession,” says Todd Teta, chief product officer for ATTOM Data Solutions.

“That said, there is some reason for concern about the potential for a change in the wrong direction, given that residential foreclosure starts increased in about a third of the nation’s metro housing markets in 2019,” he adds. “Nationally, the number also ticked up a bit in December. While that’s not a major worry, it’s something that should be watched closely in 2020.”

Lenders repossessed 143,955 properties through foreclosure (REO) in 2019, down 37% from 2018 and down 86% from a peak of 1,050,500 in 2010, to the lowest level as far back as data is available – 2006.

While completed foreclosures (REOs) are on the decline, California and Florida combined have totaled nearly 1.5 million over the last 10 years. Other states leading the nation in REOs include Michigan (333,312), Texas (323,806), Illinois (312,057) and Georgia (304,964).

Metropolitan statistical areas with a population greater than 200,000 that saw a year-over-year increase in REOs included Honolulu, Hawaii (up 34 percent); Myrtle Beach, South Carolina (up 28 percent); Florence, South Carolina (up 18 percent); Buffalo, New York (up 16 percent); and San Luis Obispo, California (up 9 percent).

“The home-foreclosure rates continued shrinking dramatically across the United in 2019 to a level not seen in 10 years, as the strong economy leaves more people in a position to make their mortgage payments,” says Ohan Antebian, general manager for ATTOM’s consumer-facing business, RealtyTrac. “Completed foreclosures dropped 37 percent overall, with decreases in all but one state and almost every metro housing market.

“As wages rise, interest rates drop, the stock market keeps hitting new highs and the broader economy remains healthy, the factors that lead to foreclosure simply aren’t there,” Antebian adds. “While home prices are rising, homeowners can afford them. The drop-off has been so steep that for every 10 completed foreclosures following the housing market crash a decade ago, there now is just one.”

Lenders repossessed 13,898 U.S. properties through completed foreclosures (REOs) in December 2019, down 1% from November but up 34% from December 2018.

Lenders started the foreclosure process on 335,985 U.S. properties in 2019, down 9% from 2018 and down 84% from a peak of 2,139,005 in 2009, to a new all-time low going back to 2006.

States that saw the decline in foreclosure starts from last year included Nevada (down 30 percent); New York (down 28 percent); New Jersey (down 21 percent); California (down 13 percent); and Arizona (down 11 percent).

Counter to the national trend, 14 states posted year-over-year increases in foreclosure starts in 2019, including Rhode Island (up 54 percent); Mississippi (up 39 percent); Georgia (up 24 percent); Arkansas (up 14 percent); and Louisiana (up 11 percent).

States with the highest foreclosure rates in 2019 were New Jersey (0.82 percent of housing units with a foreclosure filing); Delaware (0.73 percent); Maryland (0.66 percent); Florida (0.63 percent); and Illinois (0.63 percent). New Jersey has held the top spot since 2015.

Rounding out the top 10 states with the highest foreclosure rates were Connecticut (0.53 percent); South Carolina (0.52 percent); Ohio (0.48 percent); Nevada (0.42 percent); and New York (0.41 percent).

U.S. properties foreclosed in the fourth quarter of 2019 had been in the foreclosure process an average of 834 days – a 1% decline from the previous quarter, but an increase of 3% from a year ago.

States with the longest average time to foreclose in Q4 2019 were Hawaii (1,712 days); Indiana (1,629 days); Arizona (1,434 days); Nevada (1,339 days); and Georgia (1,257 days).

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