Foreclosures fall in July but starts rise in five states: Attom
With the moratorium still in place, mortgage foreclosure activity fell 83% in July compared to the year before and 4% from June, according to Attom Data Solutions.
This downward trend falls in line with 2020's first half dropping 44% from the same period in 2019 and 54% from two years ago.
Attom's report showed a total of 8,892 housing units had a foreclosure filing in July — about one in every 15,337 U.S. properties — down from 51,056 units or one in every 2,652 a year ago.
While a boon for borrowers, this period of declines should meet an abrupt end once the federal and state moratoria get lifted, according to Rick Sharga, executive vice president at RealtyTrac.
"It’s inevitable that there will be a significant increase in foreclosures once these moratoria have expired, although it’s unlikely that we’ll see default rates reach the levels we saw during the Great Recession," Sharga said in the report.
At the state level, Delaware had the highest rate of foreclosures at one in every 6,489 properties. South Carolina's one in every 7,328 units came next, followed by one in every 7,542 in Maine.
The rate of foreclosure is higher when broken down by city. Of the 220 housing markets with populations above 200,000, Trenton, N.J., posted a foreclosure share of one in every 3,445 units, followed by one in every 3,833 in McAllen, Texas, and one in every 4,038 in Davenport, Iowa.
At populations above 1 million, Louisville, Ky., had a rate of one in every 5,383 properties. Riverside, Calif., trailed with one in every 7,345 and Baltimore had third most with one in every 8,139 units.
Bank repossessions fell 80% year-over-year and 14% from June to a total of 2,163 properties.
"Even after default activity starts to increase, we may not see a similar increase in the number of repossessions," Sharga said. "The combination of record levels of homeowner equity, extremely limited supply of homes for sale, and strong homebuyer demand should give many distressed homeowners an opportunity to sell their property rather than lose it to foreclosure."
Despite the precipitous overall decline in July, foreclosure starts rose month-over-month by 54% in Connecticut, 42% in Michigan, 34% in Missouri, 32% in Virginia and 1% in California. Among metro areas with over 1 million people, Los Angeles started the most foreclosures with 285 in July, followed by 190 in New York, 182 in Chicago, 174 in Houston and 125 in Atlanta.