ATTOM Data Solutions’ third-quarter 2020 Vacant Property and Zombie Foreclosure Report shows that 1.5 million residential properties in the U.S. are vacant, representing 1.6 percent of all homes. At the same time, about 216,000 homes are in the process of foreclosure, with about 7,960, or 3.7 percent, sitting empty as so-called “zombie foreclosures.”
The count of properties in the process of foreclosure (215,886) in the third quarter of 2020 is down 16 percent from the second quarter of 2020 (258,024). But the percentage of those properties that have been abandoned as zombie foreclosures is up from 3 percent in the second quarter of 2020.
Despite the increase, the 7,961 zombie foreclosure properties continue to represent just a tiny portion – one of every 12,500 homes – of the nation’s stock of 99.4 million residential properties.
The third-quarter 2020 data shows a drop in the number of homes at some point in the foreclosure process, but an increase in the level sitting vacant at a time when the federal government is trying to shield the housing market from an economic slide stemming from the worldwide coronavirus pandemic.
Among the government’s key measures is a temporary prohibition against lenders foreclosing on government-backed mortgages. The ban, which is set to expire on Aug. 31, 2020, and affects about 70 percent of home loans in the United States, was enacted under the CARES Act passed by Congress in March of this year and then extended to help borrowers who have lost jobs or other sources of income during the pandemic.
“Abandoned homes in foreclosure remain little more than a spot on the radar screen in most parts of the United States, posing few, if any, problems from neighborhood to neighborhood. But the latest numbers do throw a small potential red flag into the air, given the increase in the percentage of zombie foreclosures,” says Todd Teta, chief product officer with ATTOM Data Solutions.
States where zombie-foreclosure rates exceeding the national percentage are clustered in the Midwest and South, including Kansas (15 percent, or one in seven, properties in the foreclosure process), Missouri (11.2 percent, or one in nine), Georgia (11 percent, or one in nine), Kentucky (10.7 percent, or one in nine) and Tennessee (10.3 percent, or one in 10).
States where the rates fall below the national level are mainly in the Northeast and West, including Utah (1.1 percent, or one in 87 properties in the foreclosure process), Idaho (1.2 percent, or one in 84), New Jersey (1.6 percent, or one in 62), Colorado (1.8 percent, or one in 56) and California (2 percent, or one in 50).
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