Foreclosures are largely a thing of the past. They surged during the Great Recession as the housing bubble exploded. From 2005 through 2008, mortgages that should have not have been granted due to low incomes and lost jobs defaulted at astonishing rates. This triggered a collapse in home prices in a number of markets. However, the housing market in 2021 is extraordinarily healthy. Home prices continue to surge, as they have for a year. Home supply has fallen because of brisk demand. However, not every metropolitan area is free of foreclosure trouble.
The new ATTOM April 2021 U.S. Foreclosure Market Report shows that one reason foreclosures are relatively low in much of the nation now relies on special circumstances that will end. Rick Sharga, executive vice president at RealtyTrac, an ATTOM Data Solutions company commented: “Foreclosure activity continues to trend near historic lows as we enter the 14th month of the Federal Government’s foreclosure and eviction moratorium.” Foreclosures are defined as “default notices, scheduled auctions or bank repossessions.”
The ATTOM data included metros measured at two size levels. In markets with populations of over 200,000, Macon, Georgia, had the worst rate of one in every 2,334 housing units with a foreclosure filing. Provo, Utah, was second at one in every 3,295 housing units. Pensacola, Florida, was next at one in every 3,492. Cleveland’s figure was one in every 3,550. Finally, Beaumont, Texas, had one in every 3,561 housing units in foreclosure.
Among cities with populations over a million, Cleveland was at the top of the list in April. Las Vegas followed with one in every 4,838 housing units. Then, Riverside, California, had one in every 5,020 housing units in foreclosure; Jacksonville, Florida, had one in every 5,243; and Chicago had one in every 5,324.
There appears to be no ready pattern among these metro areas. Cleveland is a relatively poor city. Las Vegas has a high unemployment rate because of a COVID-19 triggered drop in tourism. Riverside is a relatively affluent metro area. Chicago, the third-largest city in America after New York City and Los Angeles, is too large and diverse to draw any trends.
What is probable is that forecloses will rise soon. The federal government moratorium will only last so long.