15+ Foreclosure Statistics to Give You Hope in 2020

Imagine this:

You can’t pay your mortgage. The lender takes it back. Cue stress and disappointment.

This is exactly what happened in America back in 2008.

A decade after the recession, things are finally looking up. Foreclosure statistics show that fewer homes are getting foreclosed or repossessed.

Our foreclosure rate has hit an all-time low.

And this is not even the first quarter or the first year that this is happening. For the 12th consecutive quarter, United States foreclosures are lower than their pre-recession rate! Not only has the housing market overcome the struggles, it is now improving further.

That’s not all:

AMAZING Foreclosure Facts & Stats (Editor’s Pick):

  • What are the current foreclosures in America? Stats show 1 in 2,767 properties!
  • There have been 143,105 US properties with foreclosure filings in the past quarter.
  • Right now, there is a total of 376,052 housing foreclosures in the US.
  • Bank repossessions are down by 33% compared to last year!
  • The average time to foreclose is going up – it took an average of 841 days in the past quarter.
  • And foreclosures by state? South Dakota had the fewest foreclosure filings in the third quarter, closely followed by North Dakota, West Virginia, and Montana.
  • Delaware, Maryland, Illinois, and Florida are the states with the highest foreclosure rates in the country.

As you can see, it’s not all sunshine and roses. Contrary to the national trend, 30% of local markets are seeing a rise in foreclosures.

The US foreclosure properties have dropped by 49% compared to the pre-recession average.

But here’s the kicker:

In Maine, it’s 2194% higher! 

This is not an exception – states like Delaware, Maryland, Illinois, and Florida are experiencing a rise in their foreclosures. The same goes for 66 out of metropolitan areas.

People in San Antonio, for instance, are more likely to lose their homes to foreclosure than they were a year ago!

Is another housing market bubble rising, ready to burst?

Probably not.

Even with the regional differences and difficulties, foreclosure trends are looking great. If anything, we can expect the market to get more stable in the next decade!

Now let’s delve deeper into the current foreclosure data:

Easy access to credit, exciting mortgage offerings, low-interest rates… Those were just a few of the things that caused the housing market burst (which, in turn, was a major factor in the 2008 financial crisis).

Have we gotten smarter? 

It looks like we have!

Fewer and fewer Americans are struggling to pay for their mortgage. Look at our list of the most expensive locations to buy a home.

It seems like we’ve gotten savvier at choosing our mortgage, too:

10 years ago, only 57% of homeowners had done preliminary research online. Today, 92% of mortgage borrowers take that step before talking to a lender. While this shows how important the Internet has become to selling mortgages, it’s also proof that Americans are getting smarter (and more cautious) about choosing their mortgage.

And what are the results? Splendid so far:

1. Foreclosure activity is 19% lower compared to a year ago 

(Source: ATTOM Data Solutions)

According to recent foreclosure stats, 143,105 US properties have received some sort of foreclosure filing in the last quarter.

Seems like a lot?

During the second quarter, they were 6% more. Last year? 19% more!

Foreclosure activity is steadily dropping, which means fewer people are at risk of losing their homes.

2. This was the 12th consecutive quarter where the number of foreclosures was below the pre-recession average.  

(Source: ATTOM Data Solutions)

This is where we’re winning big.

Not only have we recovered from the recession, but the American mortgage industry is also doing better than it did before 2010! 

3. The number of repossessed properties is down by 33% from last year.  

(Source: ATTOM Data Solutions)

There is nothing more devastating for a family than losing their home. Financial struggles can lead to divorce, mental health issues, and homelessness.

Did you know that 64.4% of all homes are owner-occupied? If they couldn’t pay their mortgage, they would have nowhere to live.

Fewer repossessed properties = fewer Americans experiencing the struggle of losing their home.

Now isn’t that great news?

4. The average foreclosure process in the third quarter took 841 days.

(Source: ATTOM Data Solutions)

Losing your house isn’t as simple as the lender knocking on your door. A foreclosure process includes several notices which are extra time for people to settle their payment.

The longer it takes, the better the chances to save your home.

But, if you’re a bank that frequently loses money to people defaulting on their mortgage, would you be willing to wait? Probably not.

The average foreclosure process in 2019 is longer than ever. This means that:

  1. Lenders are better off and they can afford longer grace periods.
  2. People at risk of losing their home have more time to try and get back on their feet.

Win-win, right?

5. South and North Dakota, West Virginia, and Montana had the lowest number of houses for foreclosure in the country. 

(Source: ATTOM Data Solutions)

Looking at the number of foreclosures by state, we notice the big winners. In South Dakota, there were only 50 properties with foreclosure filings!

It’s Not All Rosy on the Foreclosure Market 

To recap: everything is amazing and the housing market is healthier than ever?

Well, yes, but actually no.

There are still plenty of problems that we’re dealing with. Granted, they tend to be local – certain markets like Delaware or Florida are experiencing the opposite of the national average. Still, for families in these states, foreclosure is becoming more likely. In other words, fewer people can pay for their homes in these areas!

Did that sound apocalyptic? Probably.

Rest assured that the difference is not so major. While there is a contrast between states like South and North Dakota (where foreclosure statistics are looking more optimistic than ever), the gap can be filled.

So what does the gap look like?

6. 30% of local markets experienced an uptick in foreclosure starts.

(Source: ATTOM Data Solutions)

When we zoom in from the bigger picture, this is the first thing to pop out. For some reason, these markets are showing signs of weakness. This is even with the generally positive trends!

7. Foreclosure filings increased in 66 metropolitan areas, including Atlanta, Georgia; Columbus, Ohio; San Antonio, Texas; Portland, Oregon; and Tucson, Arizona

(Source: ATTOM Data Solutions)

In 66 out of 220 metropolitan statistical areas, the foreclosure starts increased throughout the year. This is completely opposite to the national averages.

We’re in the 17th quarter of the over-the-year decrease in filings! Yet, in some areas, homeowners seem to be struggling more and more with their mortgage…

8. States with the highest rates include Delaware, Maryland, Illinois, and Florida.

(Source: ATTOM Data Solutions)

Counter to the national trend, here are the states with the highest number of foreclosures in the past quarter:

  • Delaware – 1:415 properties with a foreclosure filing
  • New Jersey – 1:436
  • Maryland – 1:500
  • Illinois – 1:517
  • Florida – 1:577

Also, counter to the trends, 14 states saw an increase in their foreclosures over this year. In Georgia, they rose by 32%!

9. Foreclosure timelines are shortest in Virginia; Montana; Mississippi; Alaska; and Oregon.

(Source: ATTOM Data Solutions)

With a national average of 841 days, it’s hard to believe you can lose your house in less than a year. Here is the foreclosure data on how much time the process takes in the speediest states:

  • Montana – 217 days
  • Mississippi – 229 days
  • Alaska – 258 days
  • Oregon – 283 days

It gets even more shocking:

Places like Indiana and Hawaii are what actually brings up the national average. The foreclosure process in the former takes a whopping 1,633 days!

Bottom line:

Some states are doing great. Others are struggling to see the same progress.

But do we have any actual reason to worry? Let’s try to use history to predict what is coming in 2020:

Historical Foreclosure Rates Vs The Future 

Analyzing foreclosure rates by year helps us gain insight into what has happened and what we are yet to expect.

10. Rates peaked in 2010 when they hit 2.23%

(Source: Statista)

2010 was arguably the worst year for homeowners. In the aftermath of the financial crisis, foreclosures skyrocketed. The mind-blowing rate of 2.23% meant that families were feeling less and less secure by the minute.

But this was just because of the recession, right?

Well, here is what things looked like before that:

11. The pre-recession average between Q1 2006 and Q3 2007 was 278,912.

(Source: ATTOM Data Solutions)

Right now, we are doing better than we did before the crisis hit us. Why? Because we can compare the data from 2006-2007 (in the period leading up to the 2008 financial crisis).

Back then, an average of 278,912 properties had received filings. Right now, this number is much lower. This is not sporadic, either.

The third quarter of 2019 is the 12th consecutive period where the average is going down!

Even if we take pre-recession numbers as our starting point (which means disregarding the huge challenges that the crisis posed), we’d still be seeing an improvement.

Fair to say that we have emerged victorious from a highly problematic period.

12. What about foreclosures by state? They dropped by up to 88% compared to the pre-recession average. 

(Source: ATTOM Data Solutions)

In Colorado, there are now 88% fewer properties that receive a foreclosure warning. Compared to pre-recession data, Calfornia foreclosures have decreased by 74%. Even Florida, which is currently rocking through a foreclosures rate surge, has seen a drop of 49% compared to 2006-2007.

13. 70% of homeowners believe it’s highly unlikely that they experience mortgage foreclosures.

(Source: Statista)

People are feeling safer now… Yet, not as safe as they should.

Granted, 70% of them couldn’t picture losing their homes because they couldn’t pay their mortgage.

But get that:

10% said it was very likely. 

The actual number of homes that receive foreclosure filings is under 1%!

While homeowners are more relaxed than they were before, they are still far too tangled up in finance-related anxiety. They are 10 times more afraid than they should be!

What is the lesson? There’s two, actually:

  1. If you have a mortgaged house and you’re stressed about losing it, don’t be. Odds are that you will keep it.
  2. Homeowners are more cautious (and yes, more worried) than they should be. As we saw, they are also spending more time researching mortgages and are generally savvier.

These high anxiety levels might just be a part of the overall improvement. If you’re careful about loans, you’re less likely to default, right?

Once again, there is a twist:

14. The home mortgage debt of households and NGOs is also going up – in 2019 they owed 10.44 trillion U.S. dollars. 

(Source: Statista)

For most Americans, a new house means taking out a mortgage. 63% of them have borrowed money to finance their new home. And, while home mortgage debt had been falling, it’s on the rise again.

In the second quarter of 2019, US homeowners owed a whopping $10,44 trillion!

It gets worse:

15. The volume of mortgage debt outstanding is on the rise again since 2013. 

(Source: Statista)

Between 2010 and 2013, the mortgage debt outstanding had dropped. Now, it’s going up again, even if this happens at a lower rate.

Does this look like a mortgage debt spiral? 

To some people, it does.

Before the meltdown of 2008, the market had been stable for decades. Lenders could afford to offer mortgages to subpar borrowers, they would entice buyers with low interest rates, control on the industry would be less stringent…

It all came to a crash when too many people couldn’t pay the bank back.

In other words, the crisis came after a long period of growth and stability. Can it happen again? Frustratingly enough, we can’t tell. However, much like with any other financial decision, being realistic is key.

Even though the mortgage industry is doing great, don’t rush into buying a house you can’t afford. 

And there you have it: our recap of 2019 foreclosure statistics.

What is your take on it? Do you think foreclosure trends are looking great? Or is there danger lurking in plain sight?

Let us know in the comments below!

Foreclosure FAQs

We now have more than enough information to make an educated decision. To help you out, we’ve included a handy FAQ on foreclosure, mortgages, and homeownership:

What Causes Mortgage Foreclosures?

Owners not paying their mortgage.

A mortgage, just like any loan, is a sum of money you receive that you return in monthly payments. You specifically borrow money to purchase real estate. The property itself secures the mortgage – if you can no longer pay your lender, they can take away the real estate.

These are the basic reasons for foreclosure – mortgage borrowers not paying back the loan.

Can the Bank Really Get Their Money Back? 

…. or are they being jerks and taking away people’s homes?

The answer is: yes, they can. They do by selling the property through an auction.

The bidding usually starts at the amount that is owed for that house. This way, the lender can get back the money that the original owners couldn’t pay.

How About Buying a Foreclosure? 

This could be a great deal since the original owners have paid back some of the amount.

You can buy foreclosures on the courthouse steps (sometimes literally, sometimes not). There are even options to finance them – even though they’re not strictly mortgages. Loans for foreclosures can be tricky to navigate, however, since most lenders require payment in cash on the day of the auction.

If you can afford to pay the amount in full, foreclosure properties are a great way to get a bargain price for beautiful real estate!

How Do I Find Foreclosures? 

There are multiple strategies for a successful foreclosure search. The easiest, of course, is working with a real estate agent to find a great deal. Since agents work on commission, though, it might be smarter to start with bank websites where houses for foreclosure are listed. You could also check the listings by the Department of Housing and Urban Development or the county website.

Is it worth paying for a foreclosure search service? It’s much cheaper than an agent for sure. RealtyTrac, for instance, offers up its database for under $50 a month. Just make sure you’ve checked the necessary foreclosure statistics, before making any decisions.

Sources:

  1. ATTOM Data Solutions
  2. ATTOM Data Solutions
  3. ATTOM Data Solutions
  4. ATTOM Data Solutions
  5. ATTOM Data Solutions
  6. ATTOM Data Solutions
  7. ATTOM Data Solutions
  8. ATTOM Data Solutions
  9. ATTOM Data Solutions
  10. Statista – Foreclosure rate in the United States from 2005 to 2018
  11. ATTOM Data Solutions
  12. ATTOM Data Solutions
  13. Statista – Likelihood of residence being foreclosed upon according to mortgage holders in the United States in 2018
  14. Statista
  15. Statista
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