Foreclosure starts close to pre-pandemic levels nationwide
Lenders started the foreclosure process on 67,249 U.S. properties in Q3 2022, up 1 percent from the previous quarter and up 167 percent from a year ago — nearly reaching pre-pandemic levels.
“Foreclosure starts, while rising since the end of the government’s foreclosure moratorium, still lag behind pre-pandemic levels,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “Foreclosure activity is reflecting other aspects of the economy, as unemployment rates continue to be historically low, and mortgage delinquency rates are lower than they were before the COVID-19 outbreak.”
States that posted the greatest number of foreclosure starts in Q3 2022, included California (7,368 foreclosure starts); Florida (6,671 foreclosure starts); Texas (6,217 foreclosure starts); Illinois (4,702 foreclosure starts); and New York (3,997 foreclosure starts).
Among the 223 metropolitan statistical areas analyzed in the report those that posted the greatest number of foreclosure starts in Q3 2022, included New York, New York (4,621 foreclosure starts); Chicago, Illinois (3,950 foreclosure starts); Los Angeles, California (2,275 foreclosure starts); Philadelphia, Pennsylvania (1,991 foreclosure starts); and Miami, Florida (1,990 foreclosure starts);
Counter to the national trend of quarterly increases, among those metropolitan areas with a population greater than one million that saw a decline in foreclosure starts in Q3 2022 were Tulsa, Oklahoma (down 60 percent); Kansas City, Missouri (down 26 percent); Birmingham, Alabama (down 25 percent); Minneapolis, Minnesota (down 23 percent); and Cincinnati, Ohio (down 22 percent).
Highest foreclosure rates in Illinois, Delaware, and New Jersey
Nationwide one in every 1,517 properties had a foreclosure filing in Q3 2022. States with the highest foreclosure rates in Q3 2022 were Illinois (one in every 694 housing units with a foreclosure filing); Delaware (one in every 825); New Jersey (one in every 855); South Carolina (one in every 971); and Ohio (one in every 1,027).
Among 223 metropolitan statistical areas analyzed in the report, those with the highest foreclosure rates in Q3 2022 were Peoria, Illinois (one in every 472 housing units with a foreclosure filing); Cleveland, Ohio (one in every 589); Jacksonville, North Carolina (one in every 593); Columbia, South Carolina (one in every 599); and Rockford, Illinois (one in every 602).
Bank repossessions increase nationwide
Lenders repossessed 10,515 U.S. properties through foreclosure (REO) in Q3 2022, up 18 percent from the previous quarter and up 39 percent from a year ago.
“Very few of the properties entering the foreclosure process have reverted to the lender at the end of the foreclosure,” Sharga noted. “In fact, nearly three times more homes were repossessed by lenders in the second quarter of 2019 than in the second quarter of 2022. We believe that this may be an indication that borrowers are leveraging their equity and selling their homes rather than risking the loss of their equity in a foreclosure auction.”
September 2022 Foreclosure Activity High-Level Takeaways
- Nationwide in September 2022 one in every 4,413 properties had a foreclosure filing.
- States with the highest foreclosure rates in September 2022 were Illinois (one in every 1,959 housing units with a foreclosure filing); Nevada (one in every 2,473 housing units); New Jersey (one in every 2,649 housing units); Maryland (one in every 2,825 housing units); and Ohio (one in every 2,885 housing units).
- 21,869 U.S. properties started the foreclosure process in September 2022, down 9 percent from the previous month but up 113 percent from a year ago.
- Lenders completed the foreclosure process on 3,509 U.S. properties in September 2022, down 11 percent from the previous month but up 31 percent from a year ago.