BAM’s Key Details:
- Foreclosure filings for October 2022 are up 57% year over year
- On average, one in every 4,339 housing units had at least one foreclosure filing
- October foreclosure activity was about 59 percent of pre-pandemic numbers
That number is up 57% from October 2021 but only 2% higher than the previous month.
Foreclosure filings include bank repossessions, default notices, and scheduled auctions. Data for the report is collected from more than 3,000 counties—accounting for more than 99% of the U.S. population.
Here’s what you need to know.
States with the highest foreclosure rates
Nationwide, one in every 4,339 housing units had at least one foreclosure filing in October 2022.
States with the highest foreclosure rates in October 2022 were—
- Illinois — one in every 1,779 housing units with at least one foreclosure filing
- Delaware — one in every 2,178
- New Jersey — one in every 2,305
- South Carolina — one in every 2,711
- Nevada — one in every 2,755
Even though foreclosure activity continues its slow, steady increase since the end of the government’s moratorium, we’re still far below normal levels. October foreclosure activity was about 59 percent of pre-pandemic numbers, and at its current pace foreclosures probably won’t be back to historically normal levels until sometime around mid-2023.
Major metros with the highest foreclosure rates
Among the 223 metro areas with populations of at least 200,000, those with the highest foreclosure rates in October 2022 were—-
- Fayetteville, NC — one in every 1,135 housing units with a foreclosure filing
- St. Louis, MO — one in every 1,177
- Jacksonville, NC — one in every 1,203
- Cleveland, OH — one in every 1,624
- Spartanburg, SC — one in every 1,729
Among U.S. metros with populations greater than one million, those with the worst foreclosure rates, including St. Louis, MO, and Cleveland, OH, were—
- Las Vegas, NV — one in every 2,062 housing units
- Riverside, CA — one in every 2,127
- Chicago, IL — one in every 2,154
Foreclosure completions (REOs) are up 18% from last month
Lenders repossessed 4,156 U.S. housing units through completed foreclosures (REOs) in October 2022—18% more than last month and 37% more than a year ago.
Repossessions in October were just under 31 percent of where they were in October of 2019. This suggests that borrowers in foreclosure have been able to sell their homes prior to the foreclosure auction, and that a higher percentage of properties at the auctions are being sold to third-party buyers. A new flood of REO homes seems increasingly unlikely to happen anytime soon.
States with the greatest number of REOs in October 2022 were—
- Illinois — 1,100 REOs
- New York — 273
- Pennsylvania — 251
- Michigan — 239
- California — 194
Major U.S. metros with populations greater than one million that saw the highest numbers of REOs in October 2022 included—
- St. Louis, MO — 841 REOs
- Chicago, IL — 220
- New York, NY — 147
- Philadelphia, PA — 124
- Detroit, MI — 98
States with the highest numbers of foreclosure starts
Lenders started the foreclosure process on 21,829 U.S. housing units in October 2022, down less than 1% from the prior month but up 103% from October 2021.
States with the highest numbers of foreclosure starts in October 2022 included—
- California — 2,594 foreclosure starts
- Texas — 1,901
- Florida — 1,528
- New York — 1,362
- Illinois — 1,300
Major U.S. metros with populations greater than one million that saw the highest numbers of foreclosure starts in October 2022 included—
- New York, NY — 1,655 foreclosure starts
- Chicago, IL — 1,107
- Los Angeles, CA — 816
- Philadelphia, PA — 788
- Miami, FL — 583
Top takeaways for real estate agents
If you serve one of the areas with the highest foreclosure rates, keep this data on hand to share with your clients and community. Use it to stress to home shoppers in your neighborhood the importance of not committing to a mortgage payment higher than what they can afford.
Those numbers make it all the more important to ensure your community knows the real meaning of the phrase, “Marry the house, date the rate.”
No one should be encouraged to take on a monthly mortgage payment they can’t afford—one that would increase their odds of foreclosure—based on the dangerous assumption that the borrower can refinance when rates go down.
You owe it to your clients and community to be honest about the risks involved with buying a house. There is no guarantee that any client will be able to refinance if and when rates go down.
Present the data to give your clients the fullest possible picture of what it means right now to buy a home and what their options are in today’s market.