More Californians are losing their homes as foreclosures across the state and U.S. rise (2024)

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Are more Americans losing their homes as foreclosures on US properties rise? ›

More Americans Are Losing Their Homes as Foreclosures on US Properties Rise. (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.

A new study shows home foreclosures in California are up more than 20% from this time last year. The California numbers follow a nationwide trend and are the second highest amount of any state in the country, but are nowhere near the amount of foreclosures seen during the 2008 crash.

Foreclosure starts increase nationwide

States that had the greatest number of foreclosures starts in Q1 2023 included, California (6,867 foreclosure starts); Texas (6,764 foreclosure starts); Florida (5,724 foreclosure starts); New York (4,345 foreclosure starts); and Illinois (4,006 foreclosure starts).

Bank repossessions increase 8 percent from last quarter

Lenders repossessed 12,518 U.S. properties through foreclosure (REO) in Q1 2023, up 8 percent from the previous quarter and up 6 percent from a year ago.

The decline in homeownership halted between: 2012 and 2016 for householders with less than a high school education (19.9% to 20.8%). 2016 and 2018 for those with a high school degree (30.8% to 31.4%).

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).

12. California

Of its impressive 14,328,539 housing units, 3,604 went into foreclosure, making the Golden State's foreclosure rate one in every 3,976 households.

Senate Bill 1323 (Archuleta) changes California's non-judicial foreclosure process to require an attempt be made to sell property through a multiple-listing service before the property can be foreclosed, where the total amount owed by the homeowner does not exceed 90 percent of the appraised market value of the ...

Although home prices are expected to improve in the second half of the year, the California median home price is projected to decrease by 5.6 percent to $776,600 in 2023, down from the median price of $822,300 recorded in 2022.

Will house prices go down in 2023 California? ›

Then in 2023, he expects the Federal Reserve's actions to fight inflation will cause a mild recession, and the combination of job losses and higher rates will cause the statewide median price to fall 7.1% compared with this year, with similar declines in Southern California housing market specifically.

According to the CoreLogic HPI Forecast, home prices are projected to continue their upward trajectory. The forecast indicates an expected month-over-month increase of 0.8% from March 2023 to April 2023 and a year-over-year increase of 4.6% from March 2023 to March 2024.

During times of recession, foreclosures tend to increase.

Foreclosure rate U.S. 2005-2022

The foreclosure rate reached its peak in 2010, just after the financial crisis of 2007-2009. Since then, the rate has steadily fallen.

64% of Americans own real estate. 35% of the American population does not own their own homes.

Only about 7 million of California's roughly 40 million residents own their homes, the lowest rate of home ownership in the United States, according to a new study. The study, conducted by Ruby Home Luxury Real Estate, analyzed U.S. Census data to determine the rate of home ownership across the country.

The country with the highest free-and-clear homeownership rate in the list above was Lithuania at 83%. In the U.S., the free-and-clear homeownership rate was 23%.

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).

They are mandated to return them to the original homeowner (unless another creditor has a claim). For this reason, banks simply have no incentive to price a home above the costs they need to recoup, which is why many foreclosed homes seem cheap.

Is there a moratorium on foreclosures in California? ›

delinquent before the COVID-19 hardship period. and the Department of Consumer and Business Affairs Foreclosure Prevention Unit can assist borrowers with that. The Foreclosure Moratorium had originally been extended one month from June 30, 2021, to the end of July, however, as of today, there have been no extensions.

Major reasons for foreclosures are:

Debt, particularly credit card debt. Medical emergency or illness resulting in a lot of medical debt. Divorce, or death of a spouse or partner who contributed income. An unexpected big expense.

Nearly 1 Million Americans Fear They'll Need to Leave Their Home Due to Foreclosure in the Near Future.

Additionally, Florida's foreclosure rate is a reported one in every 3,964 homes. SoFi said the number of foreclosures in the country had “drastically increased” through 2022 and that “with a total of 248,170 initiated, U.S. foreclosures rose a staggering 169 percent from the previous year.”

After California comes New York at 1.7 million and Pennsylvania at 1.5 million. Yet no-mortgage owners in California are only 33% of all homeowners – and only four places have a smaller share: D.C. at 24%, Maryland at 28% and Colorado and Utah at 30%.

In California, lenders can foreclose on deeds of trust or mortgages using a nonjudicial foreclosure process (outside of court) or a judicial foreclosure process (through the courts). The nonjudicial foreclosure process is used most commonly in our state.

California's 55.3% average homeownership rate in 2022 was the state's best since 2011 – but only Washington, D.C., at 42% and New York at 54% were lower. The highest ownership rates in 2022 were found in West Virginia at 79%, then Wyoming at 75%, Minnesota at 75%, Maine at 75% and Delaware at 75%.

It takes several months for a lender to foreclose on a California property. If everything goes according to schedule, the process typically takes approximately 120 days — about four months — but the process can take as long as 200 or more days to conclude.

Article at a Glance

Day 1 is when a payment is missed; your loan is officially in default around day 90. After 180 days, you'll receive a notice of trustee sale. About 20 days later, your bank can then set the auction. Many foreclosures go beyond 200 days.

A foreclosure stays on your credit report for seven years after the first missed mortgage payment that started the foreclosure.

What month are houses most expensive? ›

Specifically, the end of May and June typically see the most home sales. However, summer is often cited as the most expensive time to buy a house — with prices potentially as much as 10% higher. This is partly because many families want to purchase a house before their children start a new school year.

Despite what some may think, 2023 is still a good year to invest in real estate, thanks to advantages like long-term appreciation, steady rental income, and the opportunity to hedge against inflation. Mortgage rates are expected to decline, but the housing market is likely to remain competitive due to low supply.

The Market Ahead

Redfin deputy chief economist Taylor Marr expects about 16% fewer existing home sales in 2023 vs 2022. Marr believes potential buyers are still grappling with affordability, high mortgage rates, high home prices, inflation, and a potential recession. “People will only move if they need to,” Marr says.

If you need to be occupying your home by a certain date to save on rent, it's a much better deal to close at the end of the previous month (for example, January 30) instead of the beginning of the current month (February 1).

Chief Economist at First American Financial Corp, Mark Fleming, says an interest rate drop may not happen for several months. "Possibly in 2024, but it will depend on the Fed's decisions about raising rates in the second half of the year," says Fleming.

Starting in June 2020, the median price of an existing single-family home shot up from $626,170 to a peak of $900,170 in May 2022, according to data compiled by the California Association of Realtors. That's an increase of 44% in less than two years.

With mortgage rates declining faster than expected, home prices are likely to remain mostly flat throughout 2024. This will be good news for buyers who have been waiting on the sidelines for a good time to enter the market.

Homeowners owe more on their mortgages than their homes were worth and can no longer just flip their way out of their homes if they cannot make the new, higher payments. Instead, they will lose their homes to foreclosure and often file for bankruptcy in the process.

While a housing price correction is expected, we aren't in a housing bubble. Demand for homes remains high, and there are fewer home sellers than there were in 2022. And while the market is cooling, experts don't expect an actual housing crash or a housing bubble burst in 2023.

The lender is entitled to an amount sufficient to pay off the outstanding balance of the loan plus the costs associated with the foreclosure and sale—but no more. So, you might get some money if your house is foreclosed, particularly if you didn't have any other liens on your home.

How do I get a free list of foreclosures in my area? ›

In addition, during recessions, people with access to cash are in a better position to take advantage of investment opportunities that can significantly improve their finances long-term.

Reasons to Sell a Home Before a Recession

Best Price – Home prices are typically at their highest during a time of economic expansion which is the opposite of a recession. If you want to get the highest price for your home, aim to sell the home at a time of economic exuberance.

Recessions and housing market crashes may cause your house's value to decrease. However, your set mortgage rates won't lower, meaning your monthly payments will be higher than your home's worth. While many may dip into their savings to help pay the steep bills, others may need outside assistance.

The collapse of the housing market during the Great Recession displaced close to 10 million Americans and ruined the American Dream for many. The growing wealth gap in the United States exacerbated by the 2020 economic crisis has placed the American Dream out of reach for a large part of American society.

The aging of the US population will cushion the drop in the overall homeownership rate because older households have higher homeownership rates. We project the overall homeownership rate will fall from 65 percent in 2020 to 62 percent by 2040.

If you miss your mortgage loan payments, your lender can cause your home to be sold to pay off your mortgage loan. This procedure is called foreclosure.

Buying a home during a recession can sometimes be a good idea — but only for people who are lucky enough to remain financially stable. If you're thinking about buying during an economic downturn, be sure to enlist the help of an experienced local real estate agent.