In January, the number of total foreclosure filings rose by 10% from the previous month and increased by 5% compared to the same period last year, as reported by Attom, a provider of property data.
There’s also evidence suggesting that wider economic trends are starting to impact foreclosure activities more significantly.
Rob Barber, the CEO of Attom, mentioned in a report that various external elements like rising interest rates, inflation, changes in employment, and other market factors could be influencing foreclosure activities. He also noted that a spike in filings after the holiday season might have played a role.
The initiation of foreclosure processes on properties reached 21,770 in January, marking a 6% rise from December and a 5% increase from the previous January.
While there’s a national uptrend in foreclosure activities, industry experts do not foresee a surge in foreclosures for 2024.
Foreclosure activities currently stand at around 60% of the levels seen before the pandemic and are not expected to return to the figures of 2019 until possibly the latter half of 2024, according to Sharga.
Sharga attributes this outlook to the robust state of the economy, highlighted by low unemployment rates and consistent wage growth, as well as the high quality of loans.
Significant increases in home values over recent years have also contributed to enhancing homeowner equity, which in turn has helped in reducing foreclosure rates.
Sharga points out that approximately 80% of homeowners today possess more than 20% equity in their homes. Therefore, although there might be an increase in foreclosure initiations in 2024 due to the phasing out of mortgage relief programs from the Covid era, the numbers for foreclosure auctions and lender repossessions are expected to stay below the figures recorded in 2019.
Thanks for reading,
Chris
