U.S. Foreclosure Activity Drops To Lowest Level Since Nov. 2005

Real Estate In-Depth | May 2017

IRVINE, CA– ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, released its April 2017 U.S. Foreclosure Market data earlier this month, which shows foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on 77,049 U.S. properties in April, down 7% from the previous month and down 23% from a year ago to the lowest level since November 2005.

“Foreclosure activity continued to search for a new post-recession floor in April thanks in large part to the above-par performance of mortgages originated in the past seven years,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile we are seeing an elevated share of repeat foreclosures on homeowners who often fell into default several years ago but have not been able to avoid foreclosure despite the housing recovery.”

Nationwide one in every 1,723 housing units had a foreclosure filing in April 2017.

States with the highest foreclosure rates were New Jersey (one in every 562 housing units with a foreclosure filing); Delaware (one in every 706 housing units); Maryland (one in every 776 housing units); Connecticut (one in every 956 housing units); and Illinois (one in every 1,083 housing units).

Among 217 metropolitan statistical areas with a population of at least 200,000, those with the highest foreclosure rates in April were Atlantic City, NJ (one in every 237 housing units with a foreclosure filing); Fayetteville, NC (one in every 615 housing units); Trenton, NJ (one in every 620 housing units); Rockford, IL (one in every 668 housing units); and Philadelphia (on in every 733 housing units).

Counter to the national trend, the District of Columbia and seven states posted year-over-year increases in foreclosure activity, including New Jersey (up 1%); Connecticut (up 29%) and Massachusetts (up 3%).

Three of the nation’s 20 largest metro areas posted year-over-year increases in foreclosure activity: St. Louis (up 12%); Houston (up 7%) and Boston (up 3%).

“The Seattle-area economy continues to outperform the rest of the country and the housing market is going gangbusters,” said Matthew Gardner, chief economist at Windermere Real Estate, covering the Seattle market, where April foreclosure activity decreased 38% from a year ago. “As such, I’m not surprised that foreclosure activity continues to head towards pre-housing bubble averages. In fact, as banks continue to unwind their REO portfolios, I expect foreclosure levels in Seattle to drop even further in the coming months. ”

A total of 34,085 U.S. properties started the foreclosure process in April, down 6% from the previous month and down 22% from a year ago and continuing well below the pre-recession average of more than 77,000 foreclosure starts per month between April 2005 and November 2007.

Counter to the national trend, the District of Columbia and seven states posted year-over-year increases in foreclosure starts, including Connecticut (up 40%); Massachusetts (up 34%); Alabama (up 10%); Missouri (up 10%); Oregon (up 7%); and Illinois (up 6%).

Lenders completed foreclosure (REO) on 25,990 U.S. properties in April, down 9% from the previous month and down 22% from a year ago to the lowest level since February 2015.

Counter to the national trend, the District of Columbia and 15 states posted year-over-year increases in REOs in April, including New Jersey (up 45%); Arizona (up 25%); Louisiana (up 2%); Connecticut (up 4%); and Oklahoma (up 7%).