Demand for single-family homes surged in the past two year as the coronavirus pandemic hit. The increased demand led to soaring home prices. (These are 15 cities with the most overpriced housing markets.)
The reason, according to the Federal Reserve Bank of Dallas, was a perfect-storm scenario that included several factors. Low mortgage interest rates, along with stimulus checks that boosted incomes, raised demand for housing. The pandemic also led to increased demand for work-from-home space away from dense urban areas. At the same time, limited construction during lockdowns and supply-chain disruptions constrained supply of homes for sale — all leading to higher home prices.
But now the U.S. housing market appears to be coming back to earth, with some parts of the country showing early distress signs. Foreclosure filings — a measure of the health of housing markets at local, state, or national levels — are on the rise. Home foreclosure filings include default notices, bank repossessions, and scheduled auctions.
According to property data provider Attom, foreclosure filings are up 153% in the first half of the year compared to the same period last year, though they are still slightly lower than they were in the first half of 2020.
To determine the states with the most foreclosures so far this year, 24/7 Wall St. reviewed data from Attom. States are ranked by their foreclosure rate — the number of foreclosures per housing units. All data came from Attom except for population, which came from the U.S. Census Bureau’s 2020 American Community Survey. Population figures are five-year averages.
Nationwide, 1 in every 854 properties was in one stage of the foreclosure process in the first half of the year. By comparison, the foreclosure rate was much higher in 12 states, including Ohio (1 in every 475), New Jersey (1 in every 410), and Illinois (1 in every 385). (These are the neighborhoods with the most foreclosures in May.)
Other states with the 10 states highest foreclosure rates include Nevada, which ranks seventh with a foreclosure rate of 1 in every 567, Delaware, which ranks fourth with a foreclosure rate 1 in every 497 properties, and Florida, which ranks sixth with a foreclosure rate at 1 in every 560 housing units. Florida also had the highest number of housing units in foreclosure.
At the other end of the spectrum, the Dakotas and Vermont and the third lowest foreclosure rates, with more than one foreclosure in every 4,400 housing units. Also in the bottom 10 are several states in the West.
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