Zombie foreclosures – pre-foreclosure properties that have been abandoned by owners – dwindled to about 7,000 as of the third quarter – slightly above the second quarter but down 20.2% compared with the third quarter of 2023, according to ATTOM.
As of the third quarter there were roughly 1.4 million (1,357,423) residential properties in the U.S. sitting vacant. That’s 1.3%, or one in 76 homes, across the nation – roughly the same as in the second quarter.
The report also reveals that 222,934 residential properties in the U.S. are in the process of foreclosure in the third quarter – down 6% from the second quarter and down 29.3%t from the third quarter of 2023.
Foreclosure activity has declined over the past year following a surge in cases that hit after a nationwide moratorium on lenders pursuing delinquent homeowners, imposed during the coronavirus pandemic, was lifted in the middle of 2021, ATTOM says.
Zombie foreclosures are now so rare that most local housing markets around the country have little or no issues with the blight and decay those properties can attract and spread, the firm says.
“Zombie foreclosures continue to be a mere blip on the radar screen – one of many measures of the overall strength of the U.S. housing market,” says Rob Barber, CEO for ATTOM, in the report. “After some worries about a rise in abandoned homes following the end of the COVID-era foreclosure clampdown, they remain an anomaly throughout most of the country.
“One significant factor is the historically high levels of home equity,” Barber says. “This provides homeowners who may be struggling with their mortgage payments a strong incentive to negotiate new payment plans, which in turn reduces the number of foreclosures. As a result, fewer owners are simply walking away from their properties like so many did after the Great Recession of the late 2000s.”
