US Home Foreclosures Take an Upturn in July
Tens of millions of Americans financed or refinanced their homes during the Covid Pandemic downturn.
And this year and next, they’ll be forced to renew at much higher lending rates. It’s expected to be only a small factor in the 5 year housing market outlook, and likely limited to 2025 and 2026 when most refinancing will occur.
And while they wait with bated breath as the FED continues to decide on rate cuts, sadly, many will succumb to foreclosure. It’s a horrible fate for those who have invested so much in acquiring their home. And for many renters, whose landlord is going into foreclosure, it may mean homelessness.
Foreclosures aren’t always the result of higher mortgage rates. Sometimes it’s home loan qualification issues, missed or late payments, credit ratings, HOA fees, home insurance refusals, employment/salary, debt to income, and a struggling bank that won’t offer a new mortgage.
July’s Foreclosures Jump
Attom Data last week reported that foreclosures were up 15% month over month and up .2% year over year. Almost 32,000 properties in the US had a foreclosure filing, including defaults, auctions, or bank repossessions. 1 in every 1,414 housing units had a foreclosure filing in July 2024.
“July’s foreclosure activity reflects a slight shift in the housing market,” said Rob Barber, CEO at ATTOM. “With an 18 percent increase in foreclosure starts and a 14 percent rise in completed foreclosures from last month, these shifts may highlight growing pressures in certain areas.”
Nationwide in June 2024, one in every 5,071 properties had a foreclosure filing. 18,574 U.S. properties had begun the foreclosure process during June, yet was a decline of 17% vs May, and down 22.75 vs June 2023.
Lenders started the foreclosure process on 21,870 U.S. properties in July 2024, up 18 percent from last month and up 4 percent from a year ago.
According to Business Intelligence using data via the US Census Bureau, Department of Housing and Urban Development, Freddie Mac, and the National Association of Realtors, the average US homeowner mortgage payment is $2,883 on a 30-year fixed mortgage, and $3,759 on a 15-year fixed mortgage.
As this graphic from Redfin shows, home buyers have been looking at higher monthly payments. The rise is similar to 2022, when rates were elevated, yet the housing market was much better that year. Now with consumer debt becoming a factor, the rise in July foreclosure activity shouldn’t be surprising.
This rate means the market may see more than 350,000 foreclosures for 2024, if mortgage rates remain high. Although mortgage rates have declined, it didn’t help homeowners avoid their foreclosure situation.
“Mortgage delinquencies increased across all product types compared to this time last year. While delinquencies are still low by historical standards, the recent increase corresponds with a rising unemployment rate, which has historically been closely correlated with mortgage performance.” — from Marina Walsh, MBA’s vice president of industry analysis in HousingWire report.
This foreclosure trend is a sign of the times as homeowners may be running out of avenues to avoid large mortgage payment increases.
Attom added that there were 18% more foreclosure starts and a 15% growth in completed foreclosures. Delaware, Nevada, and Utah led the foreclosure increase. Provo Utah, Macon Georgia, Columbia South Carolina, and Atlantic City New Jersey were the small cities with the highest foreclosure rates last month.
California (2342), Florida (2339), Texas (2,222), Illinois (1221) and New York were the states with most foreclosures by volume in July.
Large cities with the highest foreclosure rates included Las Vegas NV, Philadelphia PA, Jacksonville FL, Chicago IL, and Riverside CA.
These rates are small compared to the 2009 housing market crash where foreclosures hit a high of 1,654,634 in 2010, two years after the start of the recession. Some economists believe 2025 could see a recession as the high FED rates effect kicks in and pandemic stimulus money runs out.
U.S. Foreclosure Market Data by State – First Half of 2024
| Rate Rank | State Name | Total Properties w/ FC Filings | % Housing Units | % Growth from H1 2023 |
% Growth from H1 2022
|
| U.S. Total | 177,431 | 0.13 | -4.39 | 7.81 | |
| 3 | Florida | 20,090 | 0.2 | 8.42 | 13.99 |
| 13 | California | 19,013 | 0.13 | 6.13 | 16.36 |
| 11 | Texas | 15,610 | 0.13 | 12.55 | 35.42 |
| 2 | Illinois | 11,336 | 0.21 | -16.76 | -19.52 |
| 12 | New York | 11,312 | 0.13 | -7.23 | 47.43 |
| 9 | Ohio | 9,236 | 0.18 | -12.42 | -16.25 |
| 1 | New Jersey | 8,076 | 0.21 | -11.19 | -12 |
| 14 | Pennsylvania | 7,141 | 0.12 | 0.92 | 29.11 |
| 15 | Georgia | 5,289 | 0.12 | -16.15 | -7.71 |
| 16 | Michigan | 5,210 | 0.11 | -26.5 | -11.89 |
| 10 | Indiana | 4,778 | 0.16 | -9.06 | -0.91 |
| 6 | Maryland | 4,762 | 0.19 | -18.71 | 62.3 |
| 5 | South Carolina | 4,568 | 0.19 | 1.26 | 0 |
| 24 | North Carolina | 4,530 | 0.1 | -20.87 | -7.87 |
| 17 | Massachusetts | 3,411 | 0.11 | 45.64 | 74.56 |
Above data courtesy of Attomdata.com.
With mortgage rates expected to ease in 2025, the outlook for foreclosures isn’t nearly as dire as it was during the pandemic or in 2008. It will likely result in some homeowners and landlords being forced to sell, since they can’t refinance nor afford to buy another property. They’ll be relinquished of their asset and left with the equity they’ve built.
Catch up on the latest for the 2025 housing market forecast and predictions for the next 5 years. Should you buy a home right now? When will the housing market unfreeze and home prices fall? Find out more about the outlook here on the real estate blog.