Home foreclosures are rising sharply nine months after federal pandemic protections ended—and they could get a lot higher by midyear, according to a report from Attom Data Solutions.
February saw 25,833 properties in the U.S. subject to a foreclosure filing, an 11% increase over January and a 129% jump from the same period in 2021. And executives at the company say double-digit increases are expected to continue through at least the fall.
The COVID foreclosure moratorium suppressed the numbers, and now the foreclosure market is normalizing. This is not a signal of distress in the market.
“February foreclosure activity looks a lot like what we can expect to see for at least the next six months—double-digit month-over-month growth, and triple-digit year-over-year increases,” said Rick Sharga, executive vice president at RealtyTrac, an Attom company.
Lenders repossessed 2,634 U.S. properties through completed foreclosures last month, though that was a notable reduction from the previous month, when mortgage companies caught up with seriously delinquent loans.
The February filings ranged from default notices to scheduled auctions and bank repossessions. Foreclosure starts were higher in 40 states, says Attom. Nationwide, one in every 5,320 housing units had a foreclosure filing, with New Jersey having the highest rates. Here’s how things looked in the top five states:
New Jersey: One in every 2,510 housing units had a foreclosure filing
Illinois: One in every 2,521 housing units
Ohio: One in every 2,801 housing units
South Carolina: One in every 3,001 housing units
Nevada: One in every 3,112 housing units
Cleveland had the nation’s highest foreclosure rate among cities last month with one in every 1,483 housing units affected.
While the numbers are escalating and likely to get much higher, Attom says the foreclosure increase is not a sign of economic turmoil or weakness in the housing market.
“It’s simply the gradual return to normal levels of foreclosure activity after two years of artificially low numbers due to government and industry efforts to protect financially impacted homeowners from defaulting,” says Sharga.
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