Foreclosure Activity Below Pre-Recession Levels in 57 Percent of Metro Areas;
Foreclosure Starts Up in 24 Percent of Markets Including Dallas, Denver, Cincinnati;
2014 FHA Loans Post Highest Foreclosure Rate for Any FHA Loan Vintage Since 2009
IRVINE, Calif. – Oct. 12, 2017 — ATTOM Data Solutions, curator of the nation’s largest multi-sourced property database, today released its Q3 2017 U.S. Foreclosure Market Report™, which shows a total of 191,824 U.S. properties with foreclosure filings — default notices, scheduled auctions or bank repossessions — in the third quarter, down 13 percent from the previous quarter and down 35 percent from a year ago to the lowest level since Q2 2006 — a more than 11-year low.
U.S. foreclosure activity in Q3 2017 was 31 percent below the pre-recession average of 278,912 properties with foreclosure filings per quarter between Q1 2006 and Q3 2007 — the fourth consecutive quarter where U.S. foreclosure activity has tracked below the pre-recession average.
“Legacy foreclosures from the high-risk loans originated between 2004 and 2008 have largely been cleared out of the distressed market pipeline,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “Meanwhile loans originated during the housing boom of the last five years are posting foreclosure rates below historic averages, with the notable exception of FHA loans originated in 2014, which have the highest foreclosure rate of any FHA loan vintage since 2009 — 29 percent above the historic average for FHA loans although still 55 percent below the peak in 2007.
“Elevated foreclosure rates on 2014 vintage FHA loans reflect a gradual loosening of credit as the sustained housing boom is slowly bolstering confidence and increasing risk tolerance in the real estate market,” Blomquist added. “This trend also explains increasing foreclosure starts in the third quarter in some of the nation’s hottest housing markets, counter to the national trend. If we see this pattern continue for 2015- and 2016-originated loans as those vintages age, we would expect to see a more widespread — although still relatively modest — lift in foreclosure activity in the next few years.”
Foreclosure starts down nationwide, up in 24 percent of local markets
Lenders started the foreclosure process on 93,724 U.S. properties in Q3 2017, down 7 percent from the previous quarter and down 16 percent from a year ago to the lowest level since ATTOM began tracking, in Q2 2005.
Counter to the national trend 51 metro areas (24 percent of the 217 analyzed in the report) posted a year-over-year increase in foreclosure starts in Q3 2017, including Dallas-Fort Worth, Texas (6 percent increase); Denver, Colorado (12 percent increase); Cincinnati, Ohio (5 percent increase); Cleveland, Ohio (29 percent increase); and Columbus, Ohio (up 23 percent).
Other major metros with a year-over-year increase in foreclosure starts in Q3 2017 included Austin, Texas (up 29 percent); Nashville, Tennessee (up 17 percent); Milwaukee, Wisconsin (up 97 percent); Oklahoma City, Oklahoma (up 34 percent); and Louisville, Kentucky (up 27 percent).
FHA foreclosure rates on 2014 vintage loans were at an 11-year high in Austin and Denver, a 10-year high in Oklahoma City and Nashville, a nine-year high in Cincinnati, Cleveland, Columbus and Dallas, and a seven-year high in Louisville.
Foreclosure activity below pre-recession levels in 57 percent of local markets
Third quarter foreclosure activity was below pre-recession averages in 123 of the 217 metro areas analyzed in the report (57 percent), including Los Angeles (55 percent below), Chicago (20 percent below), Dallas (77 percent below), Houston (63 percent below), and Miami (51 percent below).
“Foreclosure activity in the greater Seattle area continues to trend lower and is now at levels not seen since this this report was started,” said Matthew Gardner, chief economist with Windermere Real Estate, covering the Seattle market, where third quarter foreclosure activity was 46 percent below its pre-recession average. “The market remains starved for inventory which is pushing up prices well above average rates. As such, almost all housing units that were in negative equity have seen values rebound, which is why foreclosure activity has dropped to such low levels.
“As long as the regional economy continues to flourish, I do not expect to see foreclosures rise. That said, home price growth is starting to negatively impact affordability, and this is becoming troublesome,” Gardner continued. “Any slowdown in the local economy could lead to an increase in foreclosure activity, but nothing close to the levels seen during the housing recession.”
Counter to the national trend, Q3 2017 foreclosure activity was above pre-recession averages in 94 of the 217 metros analyzed in the report (43 percent), including New York (57 percent above), Philadelphia (50 percent above), Washington, D.C. (44 percent above), Baltimore (256 percent above), and Virginia Beach (371 percent above).
Highest foreclosure rates in Atlantic City, Trenton, Cleveland
States with the highest Q3 2017 foreclosure rates were New Jersey (one in every 238 housing units with a foreclosure filing); Delaware (one in every 276); Maryland (one in every 363); Illinois (one in every 426); and Ohio (one in every 455).
Among 217 metropolitan areas with at least 200,000 people analyzed in the report, those with the highest foreclosure rates in Q3 2017 were Atlantic City, New Jersey (one in every 150 housing units with a foreclosure filing); Trenton, New Jersey (one in 234); Cleveland, Ohio (one in 275); Fayetteville, North Carolina (one in 283); and Columbia, South Carolina (one in 284).
Average foreclosure timeline increases to new record high
Lenders completed the foreclosure process (REO) on 55,993 U.S. properties in Q3 2017, down 29 percent from the previous quarter and down 35 percent from a year ago to the lowest level since Q3 2006.
Properties foreclosed in the third quarter had been in the foreclosure process an average of 899 days, up from 883 days the previous quarter to a new record high.
States with the longest average time to foreclose in Q3 2017 were Indiana (1,779 days), New Jersey (1,281 days), New York (1,256 days), Florida (1,234 days), Illinois (1,087 days), and Connecticut (1,001 days).
States with the shortest average time to foreclose in the third quarter were Virginia (171 days), Arkansas (296 days), Oregon (341 days), North Carolina (417 days), and Texas (437 days).
The ATTOM Data Solutions U.S. Foreclosure Market Report provides a count of the total number of properties with at least one foreclosure filing entered into the ATTOM Data Warehouse during the month and quarter. Some foreclosure filings entered into the database during the quarter may have been recorded in the previous quarter. Data is collected from more than 2,200 counties nationwide, and those counties account for more than 90 percent of the U.S. population. ATTOM’s report incorporates documents filed in all three phases of foreclosure: Default — Notice of Default (NOD) and Lis Pendens (LIS); Auction — Notice of Trustee Sale and Notice of Foreclosure Sale (NTS and NFS); and Real Estate Owned, or REO properties (that have been foreclosed on and repurchased by a bank). For the annual, midyear and quarterly reports, if more than one type of foreclosure document is received for a property during the timeframe, only the most recent filing is counted in the report. The annual, midyear, quarterly and monthly reports all check if the same type of document was filed against a property previously. If so, and if that previous filing occurred within the estimated foreclosure timeframe for the state where the property is located, the report does not count the property in the current year, quarter or month.
About ATTOM Data Solutions
ATTOM Data Solutions is the curator of the ATTOM Data Warehouse, a multi-sourced national property database that blends property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, health hazards, neighborhood characteristics and other property characteristic data for more than 150 million U.S. residential and commercial properties. The ATTOM Data Warehouse delivers actionable data to businesses, consumers, government agencies, universities, policymakers and the media in multiple ways, including bulk file licenses, APIs and customized reports.
ATTOM Data Solutions also powers consumer websites designed to promote real estate transparency: RealtyTrac.com is a property search and research portal for foreclosures and other off-market properties; Homefacts.com is a neighborhood research portal providing hyperlocal risks and amenities information; HomeDisclosure.com produces detailed property pre-diligence reports.
ATTOM Data and its associated brands are cited by thousands of media outlets each month, including frequent mentions on CBS Evening News, The Today Show, CNBC, CNN, FOX News, PBS NewsHour and in The New York Times, Wall Street Journal, Washington Post, and USA TODAY.
Jennifer von Pohlmann
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