Residential Real Estate News
Constrained by Government COVID Moratorium, U.S. Foreclosure Filings at Record Lows
Based on ATTOM's midyear 2021 U.S. Foreclosure Market Report, there were a total of 65,082 U.S. properties with foreclosure filings -- default notices, scheduled auctions or bank repossessions -- in the first six months of 2021. That figure is down 61 percent from the same time period a year ago and down 78 percent from the same time period two years ago.
Bucking the national trend with increasing foreclosure activity compared to a year ago, were only 5 of the 220 metro areas analyzed in the report. Those metros included Tyler, Texas (up 88 percent); Brownsville, Texas (up 21 percent); Springfield, Illinois (up 19 percent); Sioux Falls, South Dakota (up 9 percent); and Lake Charles, Louisiana (up 5 percent).
"The government's foreclosure moratorium and mortgage forbearance program have created an unprecedented situation - historically high numbers of seriously delinquent loans and historically low levels of foreclosure activity," said Rick Sharga, executive Vice President of RealtyTrac, an ATTOM company. "With the moratorium scheduled to end on July 31, and half of the remaining borrowers in forbearance scheduled to exit that program over the next six months, we should start to get a more accurate read on the level of financial distress the pandemic has caused for homeowners across the country."
Delaware, Illinois, Florida post highest state foreclosure rates
Nationwide 0.05 percent of all housing units (one in every 2,112) had a foreclosure filing in the first half of 2021.
States with the highest foreclosure rates in the first half of 2021 were Delaware (0.10 percent of housing units with a foreclosure filing); Illinois (0.09 percent); Florida (0.08 percent); Ohio (0.08 percent); and Indiana (0.08 percent).
Other states with first-half foreclosure rates among the 10 highest nationwide were New Jersey (0.07 percent); Nevada (0.07 percent); South Carolina (0.07 percent); Louisiana (0.06 percent); and New Mexico (0.06 percent).
Highest metro foreclosure rates in Lake Havasu, Cleveland, Macon
Among 220 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in the first half of 2021 were Lake Havasu, Arizona (0.25 percent of housing units with foreclosure filings); Cleveland, Ohio (0.15 percent); Macon, Georgia (0.13 percent); Peoria, Illinois (0.12 percent); and Florence, South Carolina (0.12 percent).
Other metro areas with foreclosure rates ranking among the top 10 highest in the first half of 2021 were McAllen, Texas (0.12 percent of housing units with a foreclosure filing); Atlantic City, New Jersey (0.11 percent); Davenport, Iowa (0.11 percent); Shreveport, Louisiana (0.11 percent); and South Bend, Indiana (0.11 percent).
Foreclosure starts down 63 percent from last year
A total of 36,742 U.S. properties started the foreclosure process in the first six months of 2021, down 63 percent from the first half of last year but up 14 percent from the last half of 2020.
States that saw the greatest decline in foreclosure starts from the same time last year included, Maryland (down 95 percent); Oklahoma (down 87 percent); Pennsylvania (down 81 percent); Idaho (down 78 percent); and New Mexico (down 76 percent).
Bank repossessions drop to lowest level
Lenders foreclosed (REO) on a total of 9,730 U.S. properties in the first six months of 2021, down 74 percent from a year ago to the lowest six-month total since we began tracking in 2005.
"Fewer bank repossessions may be a trend we continue to see even after the government's programs protecting borrowers from foreclosure expire," Sharga noted. "Rising home prices have provided most homeowners with enough equity to sell their homes at a profit, rather than lose them to a foreclosure or repossession."
States that posted more than 100 REOs in the first half of 2021 and had the greatest year-over-year decreases in REOs, included Michigan (down 90 percent); New York (down 86 percent); New Jersey (down 84 percent); Connecticut (down 83 percent); and Pennsylvania (down 81 percent). The only state that posted a year-over-year increase in REOs in the first half of 2021 was South Dakota, with a total of 17 REOs, up 21 percent.
Q2 2021 foreclosure activity below pre-recession averages in 92 percent of markets
There were a total of 33,964 U.S. properties with foreclosure filings in Q2 2021, up less than 1 percent from the previous quarter and up 11 percent from a year ago.
The national foreclosure activity total in Q2 2021 was 88 percent below the pre-recession average of 278,912 per quarter from Q1 2006 to Q3 2007, making Q2 2021 the 19th consecutive quarter with foreclosure activity below the pre-recession average.
Second quarter foreclosure activity was below pre-recession averages in 202 out 220 (92 percent) metropolitan statistical areas with a population of at least 200,000 and sufficient historical foreclosure data, including New York, Los Angeles, Chicago, Dallas, Houston, Miami, Atlanta, San Francisco, Riverside-San Bernardino, Phoenix and Detroit.
Metro areas with second quarter foreclosure activity above pre-recession averages included Portland, McAllen, Huntsville, Salisbury, and Gulfport.
Average foreclosure timeline increases from last year
Properties foreclosed in the second quarter of 2021 took an average of 922 days from the first public foreclosure notice to complete the foreclosure process, down slightly from 930 days in the previous quarter but down from 685 days in the second quarter of 2020.
States with the longest average foreclosure timelines for foreclosures completed in Q2 2021 were Hawaii (3,068 days), New York (1,822 days), Indiana (1,617 days), Wisconsin (1,587 days), and New Jersey (1,471 days).
States with the shortest average foreclosure timelines for foreclosures completed in Q2 2021 were Wyoming (173 days), Arkansas (253 days), Tennessee (270 days), Virginia (280 days), and Mississippi (292 days).
June 2021 Foreclosure Activity High-Level Takeaways:
- Nationwide in June 2021, one in every 10,547 properties had a foreclosure filing
- States with the highest foreclosure rates in June 2021 were Nevada (one in every 3,959 housing units with a foreclosure filing); Delaware (one in every 5,700 housing units); Illinois (one in every 5,923 housing units); South Carolina (one in every 5,971 housing units); and New Jersey (one in every 6,367 housing units).
- 6,826 U.S. properties started the foreclosure process in June 2021, up 16 percent from the previous month and up 40 percent from a year ago.
- Lenders completed the foreclosure process on 2,311 U.S. properties in June 2021, up 76 percent from the previous month but down 8 percent from a year ago.
