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Foreclosure activity ticks up in the first half of 2023

It still remains well below historical norms

During the first six months of 2023, a total of 185,580 U.S. properties went into foreclosure, default notices, scheduled auctions or bank repossessions. That’s up 13% compared to the same period last year and it’s up by 185% compared to the same time period two years ago, when COVID-related restrictions were still in place. Additionally, average days to complete a foreclosure peaked in Q2 2023, according to ATTOM Data Solutions‘ latest foreclosure market report

“Similar to the first half of 2022, foreclosure activity across the United States maintained its upward trajectory, gradually approaching pre-pandemic levels in the first half of 2023,” said Rob Barber, CEO of ATTOM in a prepared statement. “Although overall foreclosure activity remains below historical norms, the notable surge in foreclosure starts indicates that we may continue to see a rise in foreclosure activity in the coming years.”

Nationwide, 0.13% of all housing units (one in every 752) had a foreclosure filing in the first half of 2023, Attom researchers found.

States that saw the greatest uptick in foreclosure activity year over year in the first half of 2023 were Maryland (up 100%); Oregon (up 99%); Alaska (up 95%); West Virginia (up 83%); and Arkansas (up 72%). In terms of overall foreclosure rates in 1H 2023, the top states were Illinois (0.25% of housing units with a foreclosure filing); New Jersey (0.24%); Maryland (0.23%); Delaware (0.23%); and Ohio (0.20%).

By metro, Cleveland, Ohio (0.33%); Atlantic City, New Jersey (0.33%); Fayetteville, North Carolina (0.30%); Columbia, South Carolina (0.29%); and Lakeland, Florida (0.29%) had the highest foreclosure rates in the first half of 2023.

Foreclosure starts on the other hand were up 15% from the first half of last year and up 36% from the first half of 2020. A total of 135,065 U.S. properties started the foreclosure process in the first six months of 2023.

California (14,217 foreclosure starts); Florida (13,837 foreclosure starts); Texas (13,419 foreclosure starts); New York (8,772 foreclosure starts); and Illinois (7,995 foreclosure starts) saw the greatest number of foreclosures starts in the first half of 2023.

Bank repossessions climbed 9% in the first half of 2023 compared to the first half of 2022, according to ATTOM. It was up 133% from the first half of 2021, but down 40% from the first half of 2020. Lenders foreclosed (Real Estate Owned) on a total of 22,672 U.S. properties in the first six months of 2023. Michigan (2,423 REOs); Illinois (2,059 REOs); Pennsylvania (1,420 REOs); California (1,362 REOs); and New York (1,350 REOs) posted the greatest number of REOs in the first half of 2023. 

Meanwhile, average time to foreclose hits an all-time high in the second quarter of 2023 with a foreclosure process lasting an average of 1, 212 days, the highest number since Q1 2018.  It was up 28% from the previous quarter and up 28% from Q2 2022.

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