The last time there was a plague of foreclosures in the United States was during the Great Recession, particularly in 2007 and 2008. Home prices had surged the previous two years, largely because rules to obtain mortgages were unusually relaxed. As people lost jobs, they also lost the ability to pay for their homes. The current strong economy and stricter loan practices have made foreclosures much less common. However, in some cities, they are fairly high.
RealtyTrac, part of ATTOM, a leading real estate data company, has just issued its July 2021 U.S. Foreclosure Market Report. Its primary conclusion is that during the month, there were 12,483 foreclosure filings nationwide. This is defined as “default notices, scheduled auctions or bank repossessions.” This was up by 40% from the same period a year ago. The primary cause is that the government moratorium that prevented many foreclosures ended. Rick Sharga, executive vice president of RealtyTrac, commented, “The end of the government’s moratorium won’t result in millions of foreclosures, but we’re likely to see a steady increase in default activity for the balance of the year.”
In July, there were foreclosure filings on one in every 11,009 housing units. Figures in several states were much higher than that. In Nevada, it was one in every 3,626. In Delaware, it was one in every 4,206, and in New Jersey, one in every 4,809.
Among the 220 cities with populations over 200,000, the highest foreclosure rates were in Atlantic City, New Jersey, where the figure was one in every 2,290 housing units, followed by Macon, Georgia, at one in every 2,853; Las Vegas, Nevada, at one in every 2,884; and Cleveland, Ohio, at one in every 3,658.
RealtyTrac does not draw conclusions about why certain markets with high foreclosures make their list. It may be no coincidence that America’s two gambling meccas are on the list. The pandemic shuttered many casinos for months, causing a surge in unemployment in these metropolitan areas.
The trend, it would seem, is that because the moratorium has been lifted, foreclosures will rise, at least for several months.