Zombie foreclosures continue to be far and few between in the fourth quarter, accounting for just 3.25% of residential properties in the foreclosure process, according to ATTOM’s latest Vacant Property and Zombie Foreclosure Report.
That’s down slightly from 3.38% in the third quarter and down slightly from 3.30% percent in the fourth quarter of 2024.
As of October, about 229,000 properties were in the foreclosure process, of which about 7,500 were zombie foreclosures.
Zombie foreclosures occur when residential property owners vacate their homes during the foreclosure porches. and leave them sitting vacant. They were more common during the 2008-2009 housing crisis, when some struggling homeowners suddenly found themselves deep in negative equity and decided to walk away. Today, zombie foreclosures barely exist – the vast majority of homeowners are in positive equity due to sharply rising home prices during the past 5 years and thus have little to no incentive to leave their properties.
States with the highest number of zombie foreclosures in the fourth quarter included Wyoming, South Dakota, Kansas, the District of Columbia, and Iowa.
“Zombie foreclosure rates continue to remain near historic lows, reflecting strong housing demand and tighter lending standards,” ATTOM says in its report. “Despite persistent affordability challenges, most homeowners maintain substantial equity, potentially reducing the likelihood of abandonment during foreclosure proceedings. Gradual increases in foreclosure activity have not translated into widespread vacancy. Overall, the stability in zombie foreclosure rates suggests a housing market that remains resilient even amid economic headwinds.”
Photo: Luis Georg Müller