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U.S. Foreclosure Activity Sees a Monthly Increase in July 2024

Foreclosure Starts Increase 18%; Completed Foreclosures Increase 14% By ATTOM Team ATTOM, a leading curator of land, property, and real estate data, released its July 2024 U.S. Foreclosure Market Report, which shows there were a total of 31,929 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — up 15% from a month ago and up slightly by .2% from a year ago. “July’s foreclosure activity reflects a slight shift in the housing market,” said Rob Barber, CEO at ATTOM. “With an 18% increase in foreclosure starts and a 14% rise in completed foreclosures from last month, these shifts may highlight growing pressures in certain areas. However soaring home prices seem to continue and have spiked the value of homes across the nation, which boosts equity for homeowners at virtually every stage of paying off mortgages. Monitoring these next few months will help us better understand the implications for the real estate sector.” Delaware, Nevada, and Utah post highest foreclosure rates Nationwide, one in every 4,414 housing units had a foreclosure filing in July 2024. States with the highest foreclosure rates were:  »         Delaware (one in every 2,214 housing units with a foreclosure filing)  »         Nevada (one in every 2,245 housing units)  »         Utah (one in every 2,289 housing units)  »         New Jersey (one in every 2,607 housing units)  »         Illinois (one in every 2,660 housing units) Among the 224 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in July 2024 were:  »         Provo-Orem, UT (one in every 940 housing units with a foreclosure filing)  »         Macon, GA (one in every 1,167 housing units)  »         Columbia, SC (one in every 1,587 housing units)  »         Spartanburg, SC (one in every 1,895 housing units)  »         Atlantic City-Hammonton, NJ (one in every 1,910 housing units) Those metropolitan areas with a population greater than 1 million with the worst foreclosure rates in July 20244 were:  »         Las Vegas, NV (one in every 2,089 housing units)  »         Philadelphia, PA (one in every 2,197 housing units)  »         Jacksonville, FL (one in every 2,274 housing units)  »         Chicago, IL (one in every 2,279 housing units)  »         Riverside, CA (one in every 2,556 housing units) Greatest numbers of foreclosure starts in California, Florida, and Texas Lenders started the foreclosure process on 21,870 U.S. properties in July 2024, up 18% from last month and up 4% from a year ago. States that had the greatest number of foreclosure starts in July 2024 included:  »         California (2,342 foreclosure starts)  »         Florida (2,339 foreclosure starts)  »         Texas (2,222 foreclosure starts)  »         Illinois (1,221 foreclosure starts)  »         New York (1,145 foreclosure starts) Those major metropolitan areas with a population greater than 1 million that had the greatest number of foreclosure starts in July 2024 included:  »         New York, NY (1,286 foreclosure starts)  »         Chicago, IL (1,555 foreclosure starts)  »         Philadelphia, PA (782 foreclosure starts)  »         Miami, FL (758 foreclosure starts)  »         Los Angeles, CA (689 foreclosure starts) Foreclosure completion numbers increase from last month Lenders repossessed 3,282 U.S. properties through completed foreclosures (REOs) in July 2024, up 14% from last month and down 2% from last year. States that had the greatest number of REOs in July 2024, included:  »         New York (377 REOs)  »         California (370 REOs)  »         Illinois (221 REOs)  »         Pennsylvania (219 REOs)  »         Michigan (212 REOs) Those major metropolitan statistical areas (MSAs) with a population greater than 1 million that saw the greatest number of REOs in July 2024 included:  »         New York, NY (271 REOs)  »         Chicago, IL (136 REOs)  »         San Francisco, CA (104 REOs)  »         Detroit, MI (100 REOs)  »         Los Angeles (97 REOs)

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Foreclosure Activity in First Half of 2024 Down from Previous Year

Foreclosure Starts Decrease 3.5 Percent in First Six Months of 2024 By ATTOM Team ATTOM, a leading curator of land, property and real estate data, released its Midyear 2024 U.S. Foreclosure Market Report, which shows there were a total of 177,431 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first six months of 2024. That figure is down 4.4% from the same time period a year ago but up 7.8% from the same time period two years ago. “In contrast to the first half of 2023, foreclosure activity across the United States experienced a decline in the first half of 2024,” stated Rob Barber, CEO for ATTOM. “In addition, U.S. foreclosure starts also decreased by 3% in the first six months of 2024. These shifts could suggest a potential stabilization in the housing market; however, monitoring these evolving patterns remains crucial to understanding the full impact on the real estate sector.” States that saw the greatest increases in foreclosure activity compared to a year ago in the first half of 2024 included:  »             South Dakota (up 93%)  »             North Dakota (up 86%)  »             Kentucky (up 73%)  »             Massachusetts (up 46%)  »             Idaho (up 30%). States with highest foreclosure rates Nationwide, 0.13% of all housing units (one in every 794) had a foreclosure filing in the first half of 2024. States with the highest foreclosure rates in the first half of 2024 were:  »             New Jersey (0.21% of housing units with a foreclosure filing)  »             Illinois (0.21%)  »             Florida (0.20%)  »             Nevada (0.19%)  »             South Carolina (0.19%) Other states with first-half foreclosure rates among the 10 highest nationwide were:  »             Maryland (0.19%)  »             Connecticut (0.19%)  »             Delaware (0.18%)  »             Ohio (0.18%)  »             Indiana (0.16%) Metros with highest foreclosure rates Among the 224 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in the first half of 2024 were:  »             Lakeland, Florida (0.32% of housing units with foreclosure filings)  »             Columbia, South Carolina (0.31%)  »             Atlantic City, New Jersey (0.28%)  »             Cleveland, Ohio (0.27%)  »             Spartanburg, South Carolina (0.27%) Other major metro areas with foreclosure rates ranking among the top 10 highest in the first half of 2024 were:  »             Jacksonville, Florida (0.25% of housing units with a foreclosure filing)  »             Bakersfield, California (0.25%)  »             Elkhart, Indiana (0.24%)  »             Orlando, Florida (0.24%)  »             Chicago, Illinois (0.24%) Foreclosure starts down 3.5% from last year A total of 130,369 U.S. properties started the foreclosure process in the first six months of 2024, down 3.5% from the first half of last year and down 32% from the first half of 2020. States that saw the greatest number of foreclosures starts in the first half of 2024 included:  »             Texas (15,375 foreclosure starts)  »             Florida (15,251 foreclosure starts)  »             California (14,964 foreclosure starts)  »             New York (7,523 foreclosure starts)  »             Illinois (7,240 foreclosure starts) Bank repossessions decline in first half of 2024 from last year Lenders foreclosed (REO) on a total of 18,726 U.S. properties in the first six months of 2024, down 17% from the first half of 2023 and down 10% from the first half of 2022, but up 92% from the first half of 2021. States that posted the greatest number of REOs in the first half of 2024 included:  »             California (1,575 REOs)  »             Pennsylvania (1,568 REOs)  »             Illinois (1,540 REOs)  »             Michigan (1,432 REOs)  »             Texas (1,197 REOs) Average time to foreclose increases for second quarter in a row Properties foreclosed in Q2 2024 had been in the foreclosure process an average of 815 days. That figure was up 11% from the previous quarter and down 33% from Q2 2023. View the full report at: https://www.attomdata.com/news/most-recent/mid-year-2024-foreclosure-market-report/

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Home Prices Hit New High

Buyers Gain Power as Stale Listings Pile Up and Price Drops Become Common By Dana Anderson Housing costs could come down in the coming months, as mortgage rates are coming down a bit and there are signs price growth could slow. Redfin agents report there is room for buyers to negotiate paying under list price for homes that need a bit of work. Pending sales post their biggest decline since the beginning of March // Pending home sales fell 3.8%, the biggest year-over-year decline in nearly four months, during the four weeks ending June 16. Buyers are shying away from earlier steps in the house-hunting process, too: Redfin’s Homebuyer Demand Index, a measure of requests for tours and other buying services from Redfin agents, declined 17% year over year to its lowest level since February. Buyers are backing off largely because housing costs are high // The median U.S. home-sale price is up 4.8% to an all-time high of $396,000, and the median monthly mortgage payment is $2,781, about $60 below its record high. The weekly average mortgage rate declined slightly to 6.95% this week, but it’s still more than double pandemic-era lows.  The irony of near-record-high housing costs // They are causing buyers to back off, and enough have backed off to give buyers who remain more negotiating power for certain homes. The other piece of good news for buyers is that housing costs could come down soon. There are signs that price growth could lose some momentum: The share of sellers dropping their list price is at its highest level since November 2022, and asking-price growth has already slowed. Mortgage rates have fallen a bit since last week’s cooler-than-expected inflation report, and they may continue declining. New listings are still near historic lows // Another reason for the decline in pending sales is a lack of new, desirable listings for buyers to choose from. New listings are up 7.7% year over year, but they’re sitting well below typical levels for this time of year; the only time on record listings June listings have been lower was in 2023. Many home listings are becoming stale, sitting on the market for 30 days or longer without going under contract; Redfin agents report that most buyers are willing to pay sky-high housing costs only for move-in ready homes in popular neighborhoods. “A few years ago, I never would have told a seller they need to freshen up their paint, fix their furnace and make sure their roof is up to date before putting their home on the market — but now, I tell them to make the house as pretty as they possibly can,” said Des Bourgeois, a Redfin Premier agent in the Detroit area. “Buyers are still out there and they’re willing to pay today’s high prices, but only if the house is in really good shape. They don’t want to spend extra money on paint or new appliances.” Homes that need work and/or aren’t in the most desirable locations can be a good opportunity for today’s buyers // They are selling under asking price in some places–if they do sell. “Things have reversed since the pandemic,” said Jonathan Ader, a Redfin Premier agent in the Palm Springs, CA area. “Now, most homes — the exception is relatively affordable homes that are move-in ready — are selling under asking price.”

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Home Flipping Activity and Profits Both Rise in Q1 2024

Investment Returns Still Low but Reach 30% Nationwide By ATTOM Team ATTOM, a leading curator of land, property and real estate data, released its first-quarter 2024 U.S. Home Flipping Report showing that 67,817 single-family homes and condominiums in the United States were flipped in the first quarter. Those transactions represented 8.7%, or one of every 12 home sales nationwide, during the months running from January through March of 2024. The latest portion was up from 7.7% of all home sales in the U.S. during the fourth quarter of 2023 — the second straight quarterly gain. While the portion was still down from 9.8% in the first quarter of last year. As flipping rates went up, fortunes kept improving for investors who buy and quickly resell homes. The latest data showed that home flippers typically earned a 30.2% gross profit nationwide before expenses on homes sold during the first quarter of this year, marking the third time in four quarters that margins increased following a six-year period of mostly uninterrupted declines. The typical first-quarter profit margin — based on the difference between the median purchase and median resale price for home flips — remained about 25 percentage points below peaks hit in 2016. It also stayed within a range that could easily be wiped out by carrying costs that include renovation expenses, mortgage payments and property taxes. But it was up from both the fourth quarter of 2023 and from a low point over the past decade of about 25% in the first quarter of last year. Gross profits on typical flips around the country, meanwhile, increased to $72,375. That remained down from a high of about $80,000 reached in 2022. But it was up from $65,000 in the fourth quarter of 2023 and was about $10,000 above last year’s low point. “The latest numbers show that investors still face an uphill climb to clear significant profits after expenses,” said Rob Barber, CEO for ATTOM. They, like others, also face tenuous times amid a housing market boom that’s cooled down over the past year. But we now have a year’s worth of a trend showing that things have started to turn around for the flipping industry, with clear signs of increasing interest flowing into the market.” The continued improvements in profits and profit margins over the past year reflect a rejuvenated pattern of investors benefitting from shifts in prices going in their favor between the time of purchase to resale. In the first quarter of 2024, the typical nationwide resale price on flipped homes increased to $312,375, a 4.1% improvement over the fourth quarter of 2023. The increase outpaced the 2.1% rise in median prices that recent home flippers were commonly seeing when they were buying their properties. Similar gaps appeared annually as well, leading to the quarterly and yearly improvement in investment returns. Home Flipping Rates Turn Upward in Almost 80% of Nation Home flips as a portion of all home sales increased from the fourth quarter of 2023 to the first quarter of 2024 in 134 of the 173 metropolitan statistical areas around the U.S. with enough data to analyze (77.5%). Most of the declines were by less than two percentage points. Among those metros, the largest flipping rates during the first quarter of 2024 were in:  »             Warner Robins, GA (flips comprised 18.7% of all home sales)  »             Macon, GA (17.1%)  »             Fayetteville, NC (15.8%)  »             Atlanta, GA (14.7%)  »             Memphis, TN (14.6%) Aside from Atlanta and Memphis, the highest flipping rates among metro areas with a population of more than 1 million were in:  »             Columbus, OH (12.8%)  »             Birmingham, AL (12.7%)  »             Kansas City, MO (12.1%) The smallest home-flipping rates among metro areas analyzed in the first quarter were in:  »             Honolulu, HI (3.7%)  »             Oxnard, CA (5.3%)  »             Naples, FL (5.4%)  »             Des Moines, IA (5.5%)  »             Seattle, WA (5.5%)

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COST OF HOME REPAIRS INCREASES BY 4.1% FROM Q1 2023

Slight Decline in Labor Costs Help Slow Overall Increase in Repairs By Rick Sharga, CJ Patrick Company The cost of home repairs and remodeling in the first quarter of 2024 continued to increase, rising by 0.59% from the prior quarter and just over 4% from the first quarter of 2023 according to the Q1 2024 Verisk Remodel Index. Costs once again set new highs for the past decade, rising over 61% from the first quarter of 2014. The Verisk Remodel Index tracks costs on 31 different categories of home repair, comprising over 10,000 line items ranging from appliances to windows. Data are compiled monthly in over 430 local market areas across the country. “Repair costs rose in each of the 31 categories of home repair that are included in our index, but the rate of increase continues to be slow down from the more rapid increases we had during and immediately after the COVID-19 pandemic,” said Greg Pyne, VP, Pricing for Verisk Property Estimating Solutions. “Labor costs appear to be coming down slightly as well, which has an impact on the overall cost of home repairs.” Quarterly costs rose in all 31 categories included in the report. The cost of framing was still slightly lower on an annual basis, and the only covered category that was not higher than in the first quarter of 2023. Framing was the only one of the six largest categories of expenditure to decline on an annual basis. The other four — cabinets, siding, paint, wood look flooring, and plumbing — all rose between 2.5% and 5.5% over the past 12 months. The cost of exterior doors rose the most compared to the last quarter, increasing by over 3.7%. Only two other categories had a quarterly increase of at least 1% — tile flooring at 1.55%, and interior home painting at 1.03%. East South Central Region Shows Highest Quarterly Increase All regions again experienced cost increases both quarterly and annually, but all of the regions reported quarterly increases of less than 1%. The East South Central Region saw costs rise by 0.72% compared to the fourth quarter of 2023, followed closely by the South Atlantic Region, where prices rose by 0.70%. The New England Region had the lowest quarterly increase at 0.51%, but the largest annual increase at 4.51%, slightly higher than the Middle Atlantic Region at 4.47% and the Mountain Region, where prices rose by 4.44%. The index has risen by 65.88% since its inception in January 2013, and the Mountain Region continued to have the highest overall cost increases over the period covered by the index, rising 70.92 points since the first quarter of 2014. The Mountain Region also has the highest increases over the past decade, with costs increasing by 64.74% since the first quarter of 2014. The Pacific Region (63.83%) and New England Region (62.81%) are the only two other regions that surpassed the national average of a 60.72% cost increase over that 10-year span. Northeastern States Have Both the Highest and Lowest Rates of Increase Delaware had the highest quarterly rate of increase in the country at 1.43%, the only state to surpass a 1% increase for the reporting period. Tennessee (0.90%), Florida (0.87%) and Montana (0.87%) barely missed that threshold. Other states with relatively high rates of quarterly increases included:  »             South Carolina (0.84%)  »             Mississippi (0.82%)  »             Michigan (0.79%)  »             New York (0.77%)  »             South Dakota (0.73%)  »             Wisconsin (0.72%) Rhode Island had the lowest rate of quarterly cost increases at 0.37%, followed by:  »             Colorado (0.38%)  »             Wyoming (0.38%)  »             Alaska (0.41%)  »             New Mexico (0.41%)  »             West Virginia (0.42%)  »             Oklahoma (0.42%)  »             Nevada (0.42%)  »             Washington DC (0.43%)  »             North Dakota (0.44%) For more information, please visit www.verisk.com or contact Rick Sharga at rick.sharga@cjpatrick.com. Verisk is a leading strategic data analytics and technology partner to the global insurance industry. It empowers clients to strengthen operating efficiency, improve underwriting and claims outcomes, combat fraud and make informed decisions about global risks, including climate change, extreme events, ESG and political issues. Through advanced data analytics, software, scientific research and deep industry knowledge, Verisk helps build global resilience for individuals, communities and businesses. For more information, please visit www.verisk.com.

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Homeowner Equity Remains Elevated

…But Dips Downward Again in First Quarter By ATTOM Team ATTOM, a leading curator of land, property, and real estate data, released its first-quarter 2024 U.S. Home Equity & Underwater Report, which shows that 45.8% of mortgaged residential properties in the United States were considered equity-rich in the first quarter, meaning that the combined estimated amount of loan balances secured by those properties was no more than half of their estimated market values. The portion of mortgaged homes that were equity-rich in the first quarter of 2024 is down from 46.1% in the fourth quarter of 2023, marking the third straight quarterly decline. The latest figure also was down from 47.2% in the first quarter of 2023, hitting the lowest point in two years. At the same time, the report shows that the portion of mortgaged homes that were seriously underwater in the U.S. rose slightly in the first few months of 2024, from 2.6% to 2.7% of all residential mortgages. Seriously underwater mortgages are those with combined estimated balances of loans secured by properties that are at least 25% more than those properties’ estimated market values. “Homeowner balance sheets continue to benefit in a huge way from the boom times in the form of elevated equity that can be used to help finance all kinds of things, from home renovations to business startups. Still, the windfalls are starting to erode bit by bit amid mounting signs that the market is no longer so super-heated,” said Rob Barber, CEO for ATTOM. “It’s too early to make any broad statements about the market direction, especially coming off the typically slower Fall and Winter months. But amid the recent trends, this year’s Spring buying season will be of heightened importance in telling us if there is a new long-term market pattern developing.” The latest equity drop-offs emerged as the national median single-family home and condo value slipped 4% over the Winter and was up just a modest 3% year-over-year during the first quarter. When prices flatten out or drop, equity usually follows even as homeowners pay off mortgages. That’s because equity is based on mortgage debt as a portion of estimated property values. Heading into the Spring buying season, the market faces a mix of forces that could drive it back up or hold it steady. Those forces include a tight supply of homes for sale and a strong investment market but also mortgage interest rates that have climbed back above 7% for a 30-year loan on top of home prices that remain a financial stretch for average wage earners.  Equity-rich share of mortgages declines quarterly in a majority of U.S. The portion of mortgages that were equity-rich decreased in 26 of the 50 U.S. states from the fourth quarter of 2023 to the first quarter of 2024, commonly by less than two percentage points. Measured annually, equity-rich levels dropped from the first quarter of 2023 to the same period this year in 25 states. The biggest quarterly declines came in the South regions, led by:  »             Kentucky (portion of mortgages homes considered equity-rich decreased from 35.4% in the fourth quarter of 2023 to 28.7% in the first quarter of 2024)  »             South Carolina (down from 42.4% to 4%)  »             Georgia (down from 46% to 43.7%)  »             Delaware (down from 39.4% to 37.2%)  »             Indiana (down from 43% to 40.9%). At the other end of the scale, equity-rich levels rose in 23 states from the fourth quarter of 2023 to the first quarter of 2024, mostly by less than one percentage point. The largest improvements were concentrated in the Midwest and West regions, led by:  »             South Dakota (up from 49.8% to 51.5%)  »             Hawaii (up from 55% to 56.5%)  »             Montana (up from 57.3% to 58.7%)  »             North Dakota (up from 30.4% to 31.5%)  »             Mississippi (up from 37.3% to 38.3%)

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