Foreclosure activity in the US at lowest ever in 2021

Foreclosure activity in the US at lowest ever in 2021

Since the pandemic arrived, the US real estate market has been enjoying one of its busiest periods on record. And a clear indication of its healthy levels comes in the latest figures for foreclosure activity in the US. According to a report from ATTOM, it fell to its lowest ever in 2021. 

Lowest levels on record

The ATTOM Year-End 2021 US Foreclosure Market Report paints a very positive picture for the sector, with just four states seeing an increase last year. The research finds that the percentage of properties in the US in foreclosure fell by 29% in 2020 and dropped still further during 2021.

At the end of last year, there were 151,153 homes at some stage of the foreclosure process, representing 0.11% of the housing stock. The figure is the lowest ever since ATTOM began recording foreclosure activity in the US in 2005 and reflects the current state of the US property market

Foreclosures reached their highest levels in 2010 when they accounted for 2.23% of the total. 

Foreclosure tsunami not happening 

When the pandemic appeared, many industry experts predicted a surge in foreclosure activity across the US. However, the latest figures show that they were far from right. 

“The Covid-19 foreclosure tsunami is clearly not happening,” said Rick Sharga, Executive Vice-President at RealtyTrac, part of ATTOM. He pointed out that economic measures from the government and mortgage industry “have prevented millions of unnecessary foreclosures”. 

Foreclosure activity in the US down 98% 

Mortgage lenders repossessed 25,662 homes through foreclosure in 2021. The figure is 49% lower than the previous year and 98% below the 2010 peak. 

Sharga believes that activity will experience a slight uptick in the first quarter of this year but will not return to normal levels during 2022. “Homeowners have a record amount of equity – over US$23 trillion – and more than 87% of those in foreclosure have positive equity,” he explained. As a result, most mortgage holders will have the chance to sell at a profit. 

Foreclosure activity in Florida 

The Sunshine State was one of the hardest hit by foreclosures during the last economic crisis. Since then, Florida has reversed the situation and currently has a relatively low level. In 2021, the state saw 2,287 repossessions, the second highest in the US. Illinois had the most (3,472) with California, Pennsylvania and Texas completing the top five. 

In terms of foreclosure starts, Florida real estate experienced a decrease during 2021, like most American states. Just four – South Dakota, Vermont, North Dakota and Nevada – saw increases. Nevada had the highest with an 85% rise in starts. 

At the end of 2021, Florida had a foreclosure rate of 0.21%, the third highest in the country. Nevada with 0.26% and Illinois with 0.23% were the two highest.

(Source: ATTOM)