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Foreclosures proceed to surge: Are they a threat to the housing market?

Is this a repeat of the 2008 housing bust?

The number of householders hit with foreclosure notices within the third quarter of the yr jumped 34% from a yr ago to just about 125,000, in line with a recent report from real estate data firm ATTOM. They were up 28% from the previous quarter.

Across the country, about 1 in every 1,121 properties had a foreclosure filing within the third quarter. That’s a return to almost pre-pandemic levels as foreclosure moratoriums put in place within the early days of COVID-19 have expired.

Filings included default notices, scheduled auctions, and bank repossessions.

“Foreclosures are on the rise again,” ATTOM CEO Rob Barber said in an announcement. “It’s evident that some homeowners are still grappling with the pandemic’s financial aftermath or encountering latest challenges.”

Is another crisis looming?
Is one other crisis looming?
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About 11,000 homes were repossessed within the third quarter, representing a 5% jump from a yr ago.

While rising foreclosures and still-high home prices might give folks some unwelcome flashbacks to the run-up to the housing bubble that burst around 2008, real estate experts don’t imagine one other foreclosure crisis is looming.

In the aftermath of the Great Recession, probably the most dangerous mortgages with payments that ballooned sharply over time have largely been eradicated from the market. These were the loans that got many householders in trouble when they might not afford their monthly housing bills.

In addition, mortgage lenders have tightened their qualification standards to make sure only the strongest borrowers receive loans.

Finally, in a reversal from the Great Recession, there are actually more buyers than there are homes on the market. This should keep home prices strong, helping to forestall one other crash.

“The number of latest cases filed by lenders within the third quarter did rise only a small amount from the identical period last yr,” Barber said. But foreclosures “actually dipped a bit quarterly — signs that the upward pattern could also be easing.”

Where are foreclosure rates the very best?

Houston has the highest rate of foreclosures among metro areas.
Houston has the very best rate of foreclosures amongst metro areas.

Homeowners in lots of parts of the country that were hit hard through the foreclosure crisis of the 2000s also had higher foreclosure rates within the third quarter of this yr.

New Jersey had the very best rate among the many states, with 1 in every 595 properties with a foreclosure filing. It was followed by South Carolina, with 1 in every 730; Delaware, with 1 in every 739; Nevada, with 1 in every 763; and Maryland, with 1 in every 780.

Of the 223 metropolitan areas that ATTOM checked out, Houston had the very best rate, with 1 in every 371 homes within the metro receiving a foreclosure filing. Atlantic City, NJ, wasn’t far behind, with 1 in every 453. Cleveland had 1 in every 459; Bakersfield, CA, had 1 in every 456; and Columbia, SC, had 1 in every 503.

Where foreclosures are falling

Foreclosures aren’t rising in every a part of the country.

This story was originally published on Realtor.com, an actual estate and rentals site. In addition to homes on the market, yow will discover rentals like Scottsdale apartmentsAustin apartmentsTampa apartments, and more.

They fell sharply in Salt Lake City, with foreclosure starts dropping 74% yr over yr within the third quarter. The metro was followed by Chicago, down 35%; Kansas City, MO, down 34%; Columbus, OH, down 22%; and Milwaukee, down 21%.

ATTOM looked only at metros with not less than 1 million residents for this portion of the evaluation.

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