Photo: Robert Clark
There was a wave of foreclosure activity throughout the US in July, according to a newly released report by ATTOM Data Solutions, a multi-sourced national property data warehouse.
Foreclosure starts were up in well over a third of all housing markets in July.
“The recent foreclosure start increases evident in the July numbers show that foreclosures in this cycle have bottomed out and are starting to rise again as the result of looser lending gradually being introduced over the last few years,” ATTOM Data Solutions senior vice president Daren Blomquist tells Livabl.
Since last year, foreclosure starts increased in 44 per cent of the metros analyzed by ATTOM.
Some 30,187 properties started the process of foreclosure for the first time in July, up less than 1 per cent from last year at the same time — following 36 consecutive months of annual decreases.
Foreclosure activity was up in 21 states compared to last year in July, including California (3 per cent) and Texas (7 per cent).
At the metro level, several hot housing markets saw marked annual increases in foreclosure activity in July, including Los Angeles, CA (20 per cent) and San Francisco, CA (10 per cent).
Yet despite the uptick in foreclosure activity, overall levels remain low and still under crisis levels.
“There can be quite a bit of noise in the monthly foreclosure numbers, and although this is an important shift in the market, we’re not anywhere close to crisis levels of foreclosure activity at this point,” says Blomquist.
Meanwhile, prospective homebuyers are likely to find the current state of the market challenging, to say the least.
“Home affordability is at its worst level in nearly 10 years, meaning homeowners are having to stretch more financially to buy a home,” says Blomquist.
The erosion of affordability is causing higher foreclosure rates on more recent loan vintages. ATTOM reports that there has been a “marked increased” on loans that originated in 2014 compared to earlier vintages.
In addition, markets experiencing some type of shock like a natural disaster or large-scale layoffs are often seeing even bigger increases in foreclosure starts.
“A prime example of this is Houston, where Hurricane Harvey damaged many homes last year, and some of those homes are now falling into foreclosure,” says Blomquist.
Click here to read the entire report.