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Foreclosure Activity

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Foreclosures Rates Highest in Illinois, New Jersey and Ohio By ATTOM Staff ATTOM, a leading curator of real estate data nationwide for land and property data, released its Midyear 2022 U.S. Foreclosure Market Report, which shows there were a total of 164,581 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the first six months of 2022. That figure is up 153% from the same time period a year ago but down just 1% from the same time period two years ago. “Foreclosure activity across the United States continued its slow, steady climb back to pre-pandemic levels in the first half of 2022,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “While overall foreclosure activity is still running significantly below historic averages, the dramatic increase in foreclosure starts suggests that we may be back to normal levels by sometime in early 2023.” Illinois, New Jersey and Ohio post highest state foreclosure rates Nationwide, 0.12% of all housing units (one in every 854) had a foreclosure filing in the first half of 2022. States with the highest foreclosure rates in the first half of 2022 were: »          Illinois (0.26% of housing units with a foreclosure filing) »          New Jersey (0.24%) »          Ohio (0.21%) »          Delaware (0.20%) »          South Carolina (0.19%) Other states with first-half foreclosure rates among the 10 highest nationwide, were: »          Florida (0.18%) »          Nevada (0.18%) »          Indiana (0.16%) »          Georgia (0.13%) »          Michigan (0.13%) Highest metro foreclosure rates in Cleveland, Atlantic City and Jacksonville Among 223 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in the first half of 2022 were: »          Cleveland, Ohio (0.40% of housing units with foreclosure filings) »          Atlantic City, N.J. (0.33%) »          Jacksonville, N.C. (0.31%) »          Chicago, Ill. (0.30%) »          Columbia, S.C. (0.30%) Other metro areas with foreclosure rates ranking among the top 10 highest in the first half of 2022 were: »          Rockford, Ill. (0.30% of housing units with a foreclosure filing) »          Lakeland, Fla. (0.27%) »          Akron, Ohio (0.24%) »          Fayetteville, N.C. (0.24%) »          Trenton, N.J. (0.23%) Foreclosure starts up 219% from last year A total of 117,383 U.S. properties started the foreclosure process in the first six months of 2022, up 219% from the first half of last year and up 19% from the first half of 2020. States that saw the greatest number of foreclosures starts in the first half of 2022 included: »          California (12,805 foreclosure starts) »          Florida (11,448 foreclosure starts) »          Tennessee (10,970 foreclosure starts) »          Illinois (8,411 foreclosure starts) »          Ohio (6,987 foreclosure starts) “It’s important to note that many of the foreclosure starts we’re seeing today – in fact, much of the overall foreclosure activity we’re seeing right now – is on loans that were either already in foreclosure or were more than 120 days delinquent prior to the pandemic,” Sharga added. “Many of these loans were protected by the government’s foreclosure moratorium, or they would have already been foreclosed on two years ago. There’s very little delinquency or default activity that’s truly new in the numbers we’re tracking.” Foreclosure Activity High-Level Takeaways Nationwide in June 2022, one in every 4,431 properties had a foreclosure filing. States with the highest foreclosure rates in June 2022 were: »          Illinois (one in every 2,096 housing units with a foreclosure filing) »          Delaware (one in every 2,117 housing units) »          Ohio (one in every 2,386 housing units) »          Nevada (one in every 2,408 housing units) »          South Carolina (one in every 2,471 housing units) 22,239 U.S. properties started the foreclosure process in June 2022, up 1% from the previous month and up 226% from a year ago. Lenders completed the foreclosure process on 3,239 U.S. properties in June 2022, up 13% from the previous month and up 40% from a year ago.

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Vulnerable Housing Markets

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Certain Markets Will Be More Susceptible to Declines in 2022 By ATTOM Staff ATTOM, a leading curator of real estate data nationwide for land and property data, released a Special Housing Risk Report spotlighting county-level housing markets around the United States that are more or less vulnerable to declines, based on home affordability, unemployment and other measures in the first quarter of 2022. The report shows that New Jersey, Illinois, and inland California had the highest concentrations of the most at-risk markets in the first quarter of 2022 — with the biggest clusters in the New York City and Chicago areas. Most southern states were less exposed. The first-quarter 2022 patterns — based on home affordability, underwater mortgages, foreclosures and unemployment — revealed that New Jersey, Illinois and California had 34 of the 50 counties most vulnerable to the potential declines. The 50 most at-risk included eight counties in the Chicago metropolitan area, six near New York City and 10 sprinkled throughout northern, central and southern California. Elsewhere, the rest of the top 50 counties were scattered mainly along the East Coast and in the Midwest. They included three each in the Cleveland, OH, and Philadelphia, PA, metropolitan areas, plus two of Delaware’s three counties. At the other end of the risk spectrum, the South had the highest concentration of markets considered least vulnerable to falling housing markets. “While the housing market has been exceptionally strong over the past few years, that doesn’t mean there aren’t areas of potential vulnerability if economic conditions continue to weaken,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “Housing markets with poor affordability and relatively high rates of unemployment, under-water loans, and foreclosure activity could be at risk if we enter a recession or even face a more modest downturn.” Counties were considered more or less at risk based on the percentage of homes facing possible foreclosure, the portion with mortgage balances that exceeded estimated property values, the percentage of average local wages required to pay for major home ownership expenses on median-priced single-family homes and local unemployment rates. The conclusions were drawn from an analysis of the most recent home affordability, equity and foreclosure reports prepared by ATTOM. Unemployment rates came from federal government data. Rankings were based on a combination of those four categories in 586 counties around the United States with sufficient data to analyze in the first quarter of 2022. Counties were ranked in each category, from lowest to highest, with the overall conclusion based on a combination of the four ranks. The wide disparities in risks come at a time when the U.S. housing market remains relatively strong but shows signs that a decade-long boom may be easing. Home prices have climbed more than 15% in most of the country over the past year, with new highs hit in about half the nation, boosting homeowner equity to record levels. But as interest rates on 30-year mortgages rates have climbed to 6%, worsening affordability for prospective homebuyers, home sales have declined every month in 2022, and home price appreciation is showing signs of retreating rapidly. “The housing market has been one of the strongest components of the U.S. economy since the onset of the COVID-19 pandemic,” Sharga noted. “But Federal Reserve actions aimed at bringing inflation down from its 41-year high are having an immediate impact on home affordability, sales, and pricing. Whether the Fed can execute a relatively soft landing, or inadvertently steers the economy into a recession will determine the fate of the housing market over the next 12-18 months.” Amid that backdrop, the national median home value rose up just 3% from late-2021 through early-2022, seller profits are starting to dip and home affordability is inching downward. Lender foreclosures against delinquent mortgages also are up.

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Homeowner Equity Grows

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Ratio of Equity Rich to Seriously Underwater Properties Now at 14 to 1 By ATTOM Staff ATTOM, a leading curator of real estate data nationwide for land and property data, released its first-quarter 2022 U.S. Home Equity & Underwater Report, which shows that 44.9% 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 50% of their homes estimated market values. The portion of mortgaged homes that were equity-rich in the first quarter of 2022 inched close to half, up from 41.9% in the fourth quarter of 2021 and from 31.9% in the first quarter of 2021. “Homeowners continue to benefit from rising home prices,” said Rick Sharga, executive vice president of market intelligence for ATTOM. “Record levels of home equity provide financial security for millions of families and minimize the chance of another housing market crash like the one we saw in 2008. But these higher home prices and rising interest rates make it extremely challenging for first time buyers to enter the market.” The report shows that just 3.2% of mortgaged homes, or one in 31, were considered seriously underwater in the first quarter of 2022, with a combined estimated balance of loans secured by the property of at least 25% more than the property’s estimated market value. That was virtually the same as the 3.1% level of all U.S. homes with a mortgage in the prior quarter, but still well down from 4.7%, or one in 21 properties, a year earlier. Across the country, 45 states saw equity-rich levels increase from the fourth quarter of 2021 to the first quarter of 2022 while seriously underwater percentages increased in 28 states, albeit by less than 1% in most cases. Year over year, equity-rich levels rose in 48 states and seriously underwater portions dropped in 46 states. “It’s likely that equity will continue to grow through the rest of 2022, although home price increases should moderate as the year goes on,” Sharga said. “Rising interest rates, the highest inflation in 40 years, and the ongoing supply chain disruptions due to the war in Ukraine are likely to weaken demand and slow down home price appreciation.” Biggest improvements in equity-rich share of mortgages in West and South The 15 states where the equity-rich share of mortgaged homes rose most from the fourth quarter of 2021 to the first quarter of 2022 were all in the western and southern regions of the U.S. States, with the biggest increases in: »          New Mexico, where the portion of mortgaged homes considered equity-rich rose from 35.3% in the fourth quarter to 43.4% in the first quarter of 2022 »          Florida (up from 46.6% to 53.6%) »          California (up from 53.7% to 60.5%) »          South Carolina (up from 35% to 41.2%) »          Montana (up from 40.5% to 45.7%) States where the equity-rich share of mortgaged homes decreased from the fourth quarter of last year to the first quarter of this year were: »          South Dakota (down from 36% to 32.3%) »          Mississippi (down from 26.3% to 23.5%) »          Louisiana (down from 22.5% to 21.6%) »          North Dakota (down from 29.3% to 28.6%) »          Pennsylvania (down from 35.49% to 35.46%). Largest increases in seriously underwater properties across South and Midwest Twelve of the 15 states with the biggest increases in the percentage of mortgaged homes considered seriously underwater from the fourth quarter of 2021 to the first quarter of 2022 were spread across the South and Midwest. They were led by: »          Mississippi (share of mortgaged homes seriously underwater up from 12.2% to 17%) »          Missouri (up from 5.1% to 6.6%) »          Louisiana (up from 10% to 11.3%) »          Pennsylvania (up from 4.2% to 5.2%) »          Delaware (up from 3.7% to 4.5%). States where the percentage of seriously underwater homes declined the most from the fourth quarter of last year to the first quarter of this year were: »          Wyoming (down from 14.3% to 10%) »          Maine (down from 4.4% to 3.1%) »          Oklahoma (down from 5.5% to 4.8%) »          Alabama (down from 5.1% to 4.6%) »          Montana (down from 3.4% to 3%)

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