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✅ Main takeaway:
Key takeaways
- Florida, South Carolina, Illinois and Delaware top the list of states with the most foreclosure activity, which includes notices of default, scheduled auctions and bank repossessions, according to a report by real estate data firm ATTOM.
- Foreclosure activity in October rose nearly 20% year over year.
In many states across the United States, homeowners are struggling to keep up with housing costs.
As of October, foreclosure activity was up 19% compared to the same month last year. It was 3% higher than September levels. However, foreclosure activity is “below historic highs,” according to a report from real estate data firm ATTOM.
Why this is important for home buyers
High foreclosure rates can impact the housing market in several ways, potentially increasing the number of homes for sale and impacting sales prices. Foreclosure rates can also provide insight into the broader health of the housing market, which can help potential buyers plan for the costs and risks associated with the homebuying process.
Some states have been affected more than others.
In Florida, foreclosure activity — defined as notices of default, scheduled auctions, and bank repossession — rose more than 70% in October year over year. In South Carolina, foreclosure activity was up about 68%, while Illinois saw a rise of about 33%, and Delaware saw a rise of about 25%.
While Colorado and Alaska were lower on the list, total foreclosure activity in those states rose by about 145% and 127%, respectively.
“Foreclosure activity continued its steady upward trend in October, marking the eighth consecutive month of year-over-year increases,” Rob Barber, CEO of ATTOM, said in a statement. “The current trend appears to reflect a gradual normalization in foreclosure volumes as market conditions adjust and some homeowners continue to face higher housing and borrowing costs.”
The homeowner is under pressure due to affordability challenges
Tampa saw the most foreclosure activity of any city in the United States, with 1 in every 1,373 residential units in foreclosure. This number is a temporary increase because county record keepers have added to some backlog of data, the report noted. Tampa was followed by Jacksonville, Orlando, Riverside and Cleveland.
“This mix of states across the Southeast, Midwest, and West suggests that increased foreclosure activity is not limited to one region, but instead reflects broader affordability challenges, rising borrowing costs, and ongoing financial pressures on some homeowners nationwide,” Megan Hunt, director of marketing at ATTOM, wrote in a blog post.
Quick fact
In a few cities, the amount of foreclosure activity decreased: Milwaukee, Indianapolis, Louisville, Washington, D.C., and Detroit.
The data comes as housing costs remain high, creating frozen market conditions that have helped keep home sales near historically low levels. Mortgage rates continue to remain high at 6.24% in Freddie Mac’s latest data, and are falling slightly despite the Fed cutting interest rates so far this year. Meanwhile, the median sales price of existing homes in September remained high at $440,387, according to the latest data from Redfin.
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