Houston Foreclosures Up Ahead of Harvey, Bucking National Trend

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Even before Hurricane Harvey hit southeast Texas in late August 2017, signs of distress had been showing up in the Houston housing market, according to the ATTOM Data Solutions August Foreclosure Market Report. Houston foreclosure starts (scheduled foreclosure auctions) increased 67 percent in August compared to a year ago, and year-to-date nearly 5,000 Houston-area homes have started the foreclosure process, up 28 percent in the metro area and counter to the national trend of foreclosure starts declining 19 percent year-to-date compared to the same time period in 2016.

Nationwide there were 75,115 properties with foreclosure filings in August, up 14 percent from an all-time low in July, but still down 21 percent from a year ago. Five states and DC saw a year-over-year increase in foreclosure activity, counter to the national trend: Alaska (up 100 percent); Wyoming (up 79 percent); DC (up 67 percent); Louisiana (up 59 percent); Vermont (up 12 percent); and Mississippi (up 9 percent).

Among 217 metro areas analyzed for the report, 35 (16 percent)  posted a year-over-year increase in overall foreclosure activity (including both foreclosure starts and foreclosure completions), counter to the national trend, including Houston, Texas (up 44 percent); (up Cleveland, Ohio (up 48 percent); Columbia, South Carolina (up 23 percent); New Orleans, Louisiana (up 20 percent); Hartford, Connecticut (up 9 percent); and Baton Rouge, Louisiana (up 52 percent).

Among those 217 metro areas, 45 (67 percent) posted a month-over-month increase in foreclosure activity, including Phoenix, Arizona (up 98 percent); San Francisco, California (up 62 percent); Detroit, Michigan (up 39 percent); Riverside-San Bernardino, California (up 29 percent); and Chicago, Illinois (up 26 percent).

“There is often a seasonal monthly increase in foreclosure activity in August paralleling the seasonal slowdown in the overall real estate market, but the 14 percent month-over-month increase nationwide this August is more than twice the average 6 percent seasonal increase in August over the previous 10 years — the highest in fact since a 37 percent month-over-month increase in August 2007,” said Daren Blomquist, senior vice president at ATTOM Data Solutions. “While this seasonal increase is certainly not enough to set off alarm bells nationwide, especially given that foreclosure activity was down annually for the 23rd consecutive month in August, there is cause for concern in a few local markets where foreclosure activity has consistently been trending higher on an annual basis this year.”

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