U.S. Foreclosure Activity Sees 10% Rise in 2023

Foreclosure Activity in 2023: A Market Correction

Despite the Rise, Still Below Pre-Pandemic Levels

In 2023, foreclosure filings in the United States witnessed a 10 percent increase, according to ATTOM’s Year-End 2023 U.S. Foreclosure Market Report.

This uptick, comprising default notices, scheduled auctions, and bank repossessions, amounted to 357,062 properties. Although this figure reflects a significant surge compared to 2022, marking a 136 percent increase from 2021, it is important to note that it remains 28 percent lower than 2019 levels, predating the pandemic’s impact on the market.

Moreover, it represents a substantial decline of 88 percent from the peak recorded in 2010, where nearly 2.9 million properties faced foreclosure.

These foreclosure filings accounted for 0.26 percent of all U.S. housing units, a slight increase from 0.23 percent in 2022. However, this figure is notably lower compared to 2019’s 0.36 percent and significantly down from the 2010 peak of 2.23 percent.

Rob Barber, CEO at ATTOM, views the recent rise in foreclosure activity as a market correction rather than a cause for alarm. He suggests that it signals a return to more traditional patterns following years of volatility in the housing market.

According to Barber, the data indicates that while foreclosure activity may fluctuate, it is unlikely to reach the highs witnessed in the last decade. Instead, there is an expectation for a market that aligns more closely with broader economic trends, with foreclosure filings becoming a predictable aspect of the housing landscape.

This shift, Barber notes, presents a silver lining, offering investors, homeowners, and industry professionals the opportunity to plan and strategize with greater confidence and insight.

The year-end foreclosure report by ATTOM offers a comprehensive count of properties with foreclosure filings throughout the year, sourced from publicly recorded and published foreclosure filings across over 3,000 counties nationwide.

This data covers more than 99 percent of the U.S. population and is available for licensing or customized reporting.

The report also includes data for December 2023, revealing 30,314 U.S. properties with foreclosure filings.

This represents a 6 percent decrease from the previous month and a 2 percent decline from the same period last year.

Foreclosure Starts See Nationwide Increase

In 2023, lenders initiated foreclosure proceedings on 270,222 properties across the United States, marking a 9 percent uptick from 2022.

This surge represents a staggering 193 percent increase from 2021 but is notably down by 20 percent from 2019 levels and a substantial 87 percent decrease from the peak recorded in 2009, where foreclosure starts reached 2,139,005.

Several states witnessed significant numbers of foreclosure starts in 2023. California led the pack with 29,180 foreclosure starts, followed closely by Texas with 28,533 and Florida with 27,427.

New York and Illinois also experienced considerable figures, recording 17,330 and 13,764 foreclosure starts, respectively.

Despite the overall national trend, six states saw a rise in foreclosure starts compared to 2019. Indiana experienced the most significant increase at 73 percent, followed by Idaho at 70 percent, Michigan at 15 percent, Nevada at 10 percent, and Minnesota at 9 percent.

Among metropolitan statistical areas with populations exceeding 1 million, notable cities reported the highest number of foreclosure starts in 2023.

New York, New York, topped the list with 18,464 foreclosure starts, followed by Chicago, Illinois, with 11,620, and Houston, Texas, with 9,476.

Los Angeles, California, and Philadelphia, Pennsylvania, also faced substantial foreclosure starts, recording 8,835 and 8,224, respectively.

Decline in Bank Repossessions Compared to 2022

In 2023, lenders took possession of 42,090 properties through foreclosures, marking a slight 2 percent decrease from the previous year.

However, this figure represents a significant drop of 71 percent from 2019 when 143,955 properties were repossessed and a substantial 96 percent decline from the peak recorded in 2010, which saw 1,050,500 bank repossessions.

Several states experienced notable numbers of bank repossessions in 2023. Illinois topped the list with 3,814 properties repossessed, followed closely by Michigan with 3,634 and Pennsylvania with 2,853.

California and New York also reported considerable figures, with 2,633 and 2,538 bank repossessions, respectively.

Among metropolitan statistical areas boasting populations exceeding 1 million, certain cities witnessed a significant number of bank repossessions in 2023.

Chicago, Illinois, led the pack with 2,505 properties repossessed, followed by New York, New York, with 2,045, and Detroit, Illinois, with 1,795. Philadelphia, Pennsylvania, and Baltimore, Maryland, also saw notable bank repossessions, recording 1,130 and 872, respectively.

Highest State Foreclosure Rates in 2023

New Jersey, Illinois, and Delaware topped the list of states with the highest foreclosure rates in 2023. In New Jersey, 0.46 percent of housing units had a foreclosure filing, closely followed by Illinois with 0.42 percent and Delaware with 0.41 percent. Maryland and Ohio also experienced significant foreclosure rates, with 0.40 percent and 0.38 percent, respectively.

Additional states in the top 10 with notable foreclosure rates in 2023 included South Carolina, Nevada, Florida, Connecticut, and Indiana, each ranging from 0.32 percent to 0.38 percent.

Highest Metro Foreclosure Rates in 2023

Among metropolitan statistical areas with a population exceeding 200,000, several cities reported the highest foreclosure rates in 2023. Cleveland, Ohio, and Atlantic City, New Jersey, tied for the highest rates at 0.62 percent, followed closely by Lakeland, Florida, at 0.56 percent.

Other metropolitan areas with significant foreclosure rates included Columbia, South Carolina, and Fayetteville, North Carolina, ranging from 0.51 percent to 0.55 percent.

In metropolitan areas with populations surpassing 1 million, Cleveland, Ohio, continued to lead in foreclosure rates, followed by Philadelphia, Pennsylvania, Jacksonville, Florida, Las Vegas, Nevada, and Chicago, Illinois, with rates ranging from 0.45 percent to 0.48 percent.

Average Time to Foreclose Decreases Quarterly and Annually

The average duration for U.S. properties to complete the foreclosure process decreased notably in the fourth quarter of 2023. Properties foreclosed during this period had been in the foreclosure process for an average of 720 days, marking a 7 percent decrease from the previous quarter and a 16 percent decrease from the same period last year.

Longest Time to Foreclose by State in Q4 2023

In the fourth quarter of 2023, Louisiana, Hawaii, New York, Nevada, and Kentucky recorded the longest average time to complete foreclosures.

Louisiana topped the list with an average of 2,641 days, followed by Hawaii with 2,031 days, and New York with 2,006 days. Nevada and Kentucky followed closely with 1,816 days and 1,643 days, respectively.

Key Highlights of Foreclosure Activity in Q4 2023

Throughout the fourth quarter of 2023, there were a total of 92,896 properties with foreclosure filings, marking an 8 percent decrease from the previous quarter but a 2 percent increase from the same period last year. Nationally, one in every 1,503 properties had a foreclosure filing during this time.

States with the highest foreclosure rates in Q4 2023 included Delaware, New Jersey, Ohio, Maryland, and South Carolina, with ratios ranging from one in every 903 housing units to one in every 995 housing units.

December 2023 Foreclosure Activity Overview

In December 2023, one in every 4,606 properties across the nation had a foreclosure filing. States with the highest foreclosure rates during this month were Maryland, Connecticut, New Jersey, Ohio, and Delaware, with ratios ranging from one in every 2,570 housing units to one in every 2,967 housing units.

Additionally, 20,490 properties initiated the foreclosure process in December 2023, marking an 8 percent decrease from the previous month and a 3 percent decrease from the same period last year.

Lenders completed the foreclosure process on 3,503 properties during December 2023, reflecting a 37 percent increase from the previous month but a 4 percent decrease from the same period last year.