ATTOM’s May 2024 Foreclosure Market Report found that there were a total of 32,621 U.S. properties with foreclosure filings during the month—default notices, scheduled auctions, or bank repossessions—up 3% from April 2024, but down 7% from a year ago.
“May’s foreclosure activity highlights nuanced shifts in the housing market,” said Rob Barber, CEO at ATTOM. “While we observed a slight increase in foreclosure starts, the decline in completed foreclosures indicates resilience in certain areas. Monitoring these evolving patterns remains crucial to understanding the full impact on the real estate sector.”
Increases in delinquencies and defaults are generally tied to the state of the nation’s employment situation, and as the Bureau of Labor Statistics (BLS) reported for May, total nonfarm payroll employment actually increased by 272,000 in May, and the unemployment rate changed little at 4%. Employment continued to trend up in several industries, led by healthcare; government; leisure and hospitality; and professional, scientific, and technical services. Both the unemployment rate, at 4%, and the number of unemployed people, at 6.6 million, changed little in May. A year ago, the jobless rate stood at 3.7%, and the number of unemployed nationwide was 6.1 million.
The regional breakdown
Nationwide, one in every 4,320 housing units had a foreclosure filing in May 2024. States reporting the highest foreclosure rates were:
- New Jersey (one in every 1,939 housing units with a foreclosure filing);
- Illinois (one in every 2,362 housing units);
- Delaware (one in every 2,595 housing units);
- Connecticut (one in every 2,600 housing units); and
- Florida (one in every 2,638 housing units).
Among the 224 metropolitan statistical areas (MSAs) with a population of at least 200,000, those with the highest foreclosure rates in May 2024 were:
- Longview, Texas (one in every 1,162 housing units with a foreclosure filing);
- Trenton, New Jersey (one in every 1,471 housing units);
- Atlantic City, New Jersey (one in every 1,569 housing units);
- Lakeland, Florida (one in every 1,584 housing units); and
- Bakersfield, California (one in every 1,685 housing units).
Those metropolitan areas with a population greater than one million with the worst foreclosure rates in May 2024 were reported in:
- Chicago (one in every 2,015 housing units);
- Philadelphia (one in every 2,143 housing units);
- Riverside, California (one in every 2,216 housing units);
- Jacksonville, Florida (one in every 2,267 housing units); and
- Las Vegas (one in every 2,361 housing units).
Lenders started the foreclosure process on 22,385 U.S. properties in May 2024, up 3% from last month, but down 4% year-over-year. States that reported the greatest number of foreclosure starts in May 2024 included:
- Florida (2,750 foreclosure starts);
- Texas (2,560 foreclosure starts);
- California (2,370 foreclosure starts);
- Illinois (1,427 foreclosure starts); and
- New Jersey (1,219 foreclosure starts).
The major metropolitan areas with a population greater than one million that had the greatest number of foreclosure starts in May 2024 included:
- New York, New York (1,447 foreclosure starts);
- Chicago (1,272 foreclosure starts);
- Houston (915 foreclosure starts);
- Miami, Florida (750 foreclosure starts); and
- Philadelphia (713 foreclosure starts).
Lenders repossessed 2,879 U.S. properties through completed foreclosures (REOs) in May 2024, down 1% from last month and down 28% year-over-year. States that reported the greatest number of REOs in May 2024 included:
- California (254 REOs);
- Illinois (254 REOs);
- Pennsylvania (238 REOs);
- Ohio (177 REOs); and
- Texas (167 REOs).
MSAs with a population greater than one million that saw the greatest number of REOs in May 2024 included:
- Chicago (179 REOs);
- New York, New York (124 REOs);
- Baltimore (84 REOs);
- Pittsburgh (80 REOs); and
- Washington, D.C. (69 REOs).
The state of loss mitigation
And as home prices continue to average $360,681 nationally according to Zillow, and up 4.3% year-over-year, rates waver above and below the 7% range, and affordability struggles linger, the Mortgage Bankers Association (MBA) recently reported on the latest forbearance numbers, as the total number of loans in forbearance stands at 0.22% as of April 30, 2024. According to MBA’s estimate, 110,000 homeowners are in forbearance plans, while the nation’s mortgage servicers have provided forbearance options to approximately 8.1 million borrowers since March 2020.
In addition, in April 2024:
- The share of Fannie Mae and Freddie Mac (GSE) loans in forbearance declined one basis point from 0.12% to 0.11%. Ginnie Mae loans in forbearance dropped one basis point from 0.40% to 0.39%, and the forbearance share for portfolio loans and private-label securities (PLS) remained the same at 0.31%.
- By reason, 71.1% of borrowers are in forbearance for reasons such as a temporary hardship caused by job loss, death, divorce, or disability, while 11.5% of borrowers were still in forbearance due to COVID-19-related instances.
- By stage, 57.3% of total loans in forbearance in the initial forbearance plan stage, while 22.7% are in a forbearance extension. The remaining 20% are forbearance re-entries, including re-entries with extensions.
- Total loans serviced that were current (not delinquent or in foreclosure) as a percentage of servicing portfolio volume (#) increased to 96.09% (on a non-seasonally adjusted basis) in April 2024, up 17 basis points from 95.92% in March 2024.
