Foreclosure low shows market recovered from housing crisis: Attom
The distressed real estate market has bounced back from the housing bubble as most foreclosures are due to natural disasters, according to Attom Data Solutions.
Overall foreclosure filings — properties with a default notice, scheduled for auction or repossessed by a bank — dropped to their lowest level in 13 years. A total of 624,753 properties filed in 2018, down 8% year-over-year.
It also represents a 78% drop since peaking in 2010 at 2.9 million properties and a 2.23% rate. Foreclosure activity declined each subsequent year since 2010 as well.
"Plummeting foreclosure completions combined with consistently falling foreclosure timelines in 2018 provide evidence that most of the distress from the last housing crisis has now been cleaned up," Todd Teta, chief product officer at Attom Data Solutions, said in a press release. "But there was also some evidence of distress gradually returning to the housing market in 2018, with foreclosure starts increasing from the previous year in more than one-third of all state and local housing markets."
Foreclosure starts and bank repossessions hit record lows nationwide.
Lenders started new foreclosures on 369,170 properties in 2018, down 6% from the year prior and 83% lower from 2009's high of over 2.1 million. Despite the national trend, 18 states saw annual upswings in foreclosure starts, led by Minnesota's 29% increase and 15% jumps in Texas and Michigan.
Property repossession through foreclosure fell 21% year-over-year to 230,305 in 2018. Repossessions peaked at 1,050,500 in 2010.
"Some of that distress was driven by natural disasters, most notably in Houston, where foreclosure starts increased 61%," Teta continued. "But natural disasters do not explain the increase in markets such as Detroit, Minneapolis-St. Paul, Milwaukee and Austin, Texas — all of which posted double-digit percentage increases in foreclosure starts in 2018."
The overall foreclosure rate for 2018 was 0.47%. At the state level, New Jersey had the highest rate at 1.33%. Delaware's 0.96% was second and Maryland's 0.86% followed in third.
The average time to foreclose declined year-over-year for the fourth-straight quarter. The foreclosure process averaged 811 days in the fourth quarter of 2018, down 21% from the year before but up 14% from the previous quarter.