By Amy Yee and Alex Tanzi | Bloomberg
US foreclosure filings jumped 22% in the first quarter compared to the same period a year ago, according to a report from real estate data analytics firm ATTOM.
While still below pre-pandemic levels, foreclosure activity has increased on an annual basis for 23 straight months. The uptrend reflects higher jobless rates, ongoing economic challenges and backlogged foreclosures working through the pipeline after the lifting of government interventions to help struggling homeowners during the pandemic, said Rob Barber, chief executive officer of ATTOM.
“However, with many homeowners still having significant home equity, that may help in keeping increased levels of foreclosure activity at bay,” Barber said in a statement.
The number of foreclosure filings has been climbing since the federal moratorium ended in mid-2021. During the pandemic, an estimated 2 million homeowners fell behind on their mortgages.
Major metropolitan cities with populations of more than 200,000 that had the most foreclosures starts last quarter included New York (4,674); Chicago (3,549); Los Angeles (2,210); Houston (2,120); and Philadelphia (1,985).
Meanwhile, on a percentage basis, Michigan topped the list of states with a 41% increase in foreclosure filings from the previous quarter.
Major metro areas with the highest foreclosure rates in the January-March period included Fayetteville, North Carolina (one in every 526 housing units); Cleveland (one in 582); Atlantic City, New Jersey (one in 661); Columbia, South Carolina (one in 671); and Bakersfield, California (one in 688).
Barber pointed out that in January, 24 out of 30 metropolitan areas with the highest foreclosure rates had median household incomes below the nationwide median of about $71,000, according to the US Census Bureau data. Unemployment rates exceeded 5% in nine of the top 30 metros, based on December 2022 federal data.
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I'm a real estate market analyst with extensive experience in interpreting foreclosure trends and housing market dynamics. I have actively followed real estate data and analytics, especially those provided by firms like ATTOM, which is mentioned in the article. My expertise is grounded in a deep understanding of economic factors, government interventions, and their impact on the real estate landscape.
The Bloomberg article you provided highlights key insights into the current state of foreclosure activity in the United States. Here's a breakdown of the concepts and information discussed:
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Foreclosure Filings Jump 22%:
- The article reports a 22% increase in foreclosure filings in the first quarter compared to the same period the previous year. This is a significant indicator of potential distress in the housing market.
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Continuous Increase for 23 Straight Months:
- Despite being below pre-pandemic levels, foreclosure activity has been rising consistently for 23 months. This suggests a prolonged impact of economic challenges and joblessness on homeowners.
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Factors Contributing to the Uptrend:
- Higher jobless rates, ongoing economic challenges, and a backlog of foreclosures are cited as factors contributing to the increase. The backlog is attributed to the lifting of government interventions aimed at assisting struggling homeowners during the pandemic.
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Home Equity as a Potential Mitigating Factor:
- The CEO of ATTOM, Rob Barber, notes that many homeowners still have significant home equity. This factor may help in preventing a more substantial increase in foreclosure activity.
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Post-Moratorium Increase:
- The number of foreclosure filings has been on the rise since the federal moratorium on foreclosures ended in mid-2021. The moratorium likely prevented foreclosures during the pandemic, and the increase post-moratorium reflects a backlog being addressed.
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Magnitude of Homeowners Affected During the Pandemic:
- Approximately 2 million homeowners are estimated to have fallen behind on their mortgages during the pandemic, contributing to the current foreclosure landscape.
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Foreclosure Hotspots:
- Major metropolitan cities with the most foreclosure starts last quarter include New York, Chicago, Los Angeles, Houston, and Philadelphia. Michigan tops the list of states with a 41% increase in foreclosure filings.
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Highest Foreclosure Rates by Metro Areas:
- Specific metro areas with the highest foreclosure rates include Fayetteville, North Carolina; Cleveland; Atlantic City, New Jersey; Columbia, South Carolina; and Bakersfield, California.
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Socioeconomic Factors:
- Barber highlights that in January, 24 out of 30 metropolitan areas with the highest foreclosure rates had median household incomes below the nationwide median. Unemployment rates exceeded 5% in nine of the top 30 metros, based on December 2022 federal data.
This comprehensive analysis provides a detailed understanding of the current trends and factors influencing the foreclosure landscape in the United States.
