Foreclosure rates continue to lurch upward but remain far below pre-pandemic norm

Attom Data Solutions’ most recent U.S. Foreclosure Market Report revealed that 32,378 residential properties across the country carried foreclosure filings in October, up 2% month over month and 57% above year-ago levels.

Put another way, one in every 4,339 housing units in the U.S. had a foreclosure filing. The total number of foreclosures in October was boosted by 21,829 foreclosure starts during the month, essentially flat compared to September, but up a whopping 103% from the same month in 2021.

Foreclosure numbers have gradually increased as many of the federal support policies instituted for homeowners during the COVID-19 pandemic have ended. But as Rick Sharga, Attom Data’s executive vice president of market intelligence, pointed out, foreclosures remain historically low.

“Even though foreclosure activity continues its slow, steady increase since the end of the government’s moratorium, we’re still far below normal levels,” he said. “October foreclosure activity was about 59% of pre-pandemic numbers, and at its current pace, foreclosures probably won’t be back to historically normal levels until sometime around mid-2023.”

More than one-quarter of all foreclosure starts were concentrated in three states: California (2,594 starts), Texas (1,901) and Florida (1,528). Among large metros, New York City had the most starts (1,655), followed by Chicago (1,107) and Los Angeles (816). Foreclosure completions, on the other hand, grew to 4,156 properties in October, up 18% monthly and up 37% annually.

“Repossessions in October were just under 31% of where they were in October of 2019,” Sharga added. “This suggests that borrowers in foreclosure have been able to sell their homes prior to the foreclosure auction and that a higher percentage of properties at the auctions are being sold to third-party buyers. A new flood of REO (real estate owned) homes seems increasingly unlikely to happen anytime soon.”

Illinois led the country in REOs in October by a wide margin, with 1,100, followed by New York (273) and Pennsylvania (251).


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