Foreclosure Rate Trends

February 15th, 2023

2022 recap on the state of foreclosures

ATTOM’s Year-End 2022 US Foreclosure Market Report offered mixed reviews. At 324,237 US properties, 2022 foreclosure filings exceeded 2021 by 115% with one in 432 housing units in foreclosure. That’s down 34% from 2019 pre-pandemic levels and 89% from the 2010 peak of close to 2.9 million.

Keep in mind, the properties with 2022 foreclosure filings account for a scant 0.23% of all US housing units. That’s a bump of 0.11% over 2021, but still 0.36% less than 2019. In fact, ATTOM reports “significantly lower” foreclosure activity compared with pre-pandemic levels.

The upshot: Government and mortgage industry efforts combined with a strong economy “have helped prevent millions of unnecessary foreclosures.”

What's happening state by state?

The highs and lows: Illinois, New Jersey and Delaware top the list with the highest foreclosure rates in the nation. Rhode Island’s rate now ranks well below the national average. 

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  • LIS=Lis Pendens: Notification of pending lawsuit. The initial document filed by an attorney or trustee that starts the foreclosure process after the occurrence of default under the deed of trust or mortgage.
  • REO=Real Estate Owned: Real estate owned by the lender; the final step in foreclosure process. This document conveys property ownership back to lender.

The highs: Connecticut ended 2022 with one in 374 housing units in foreclosure. That’s higher than the national average and double the rate in neighboring Massachusetts (one in 744). Of these, 205 foreclosure sales transferred title back to the mortgage loan servicer (REOs), a 225% jump from January 2022 but just 15% of pre-pandemic REO activity. By the end of December, 3,616 homes had entered the initial (lis pendens filing) stage, a 68% year-over-year increase and 270% higher than pre-pandemic levels. 

The lows: The overwhelming majority of Connecticut homes in foreclosure were at the beginning of the foreclosure process.

The highs: With 0.38% of all homes in foreclosure in December 2022 (one in 260), Delaware saw a 46% year-over-year increase, one of the highest rates in the country.

The lows: Despite the increase, 92% of Delaware homes in foreclosure are at the beginning of the process (versus 82% nationally). Fewer than 100 homes had notice of foreclosure sale filings or REO transactions in December (of nearly 500,000 housing units statewide). In 2022, Delaware reported just 217 REO transactions, compared with 366 in January 2020 alone.

The highs: Illinois continues to experience one of the nation’s highest foreclosure rates. As of December 2022, one in 224 housing units was in foreclosure, nearly double the national average. With 5.4 million housing units, Illinois has 3.9% of the nation’s housing units yet accounted for 7.5% of the units in foreclosure nationwide and 11.9% of REO transactions in 2022. In December, the state reported just over 2,000 REO transactions, nine times the September volume. Since June, Illinois has averaged over 19,000 lis pendens filings per month.

The (mostly) lows: Maryland finished the year with one in 549 housing units in foreclosure, or 0.022 percent of the state’s 2.5 million housing units. Maryland’s foreclosure rate not only ranks better than the national average but also outranks neighboring Pennsylvania (one in 398) and Delaware (one in 260). Like most states, Maryland showed a sizable increase in year-over-year foreclosures. Yet at 77%, its year-over-year increase still ranks below the national average of 82%.

The (mostly) lows: Less than 750 of the commonwealth’s nearly 3 million housing units were in the foreclosure process at the end of 2022 – well below the national rate and that of neighboring Connecticut. There were 230 REO transactions in December 2022 and just over 1,000 for the entire year. As with most states, the majority of current foreclosure activity is early in the process. Nationwide, 83% of all homes in foreclosure have had a lis pendens filing but no notice of sale, roughly the same as the 82% rate in Massachusetts.

The (mostly) highs: Of Michigan’s 4.5 million homes, just one in 1,243 (.08%) is in foreclosure. But since Michigan’s initial foreclosure filing requirements differ from most states, the numbers tell a somewhat misleading story. Case in point: Homes with seriously delinquent mortgage loans that most states would label “in foreclosure” are not counted as such in Michigan. What’s more, year-over-year increases of homes under notice of foreclosure sales and REO transactions outpace the national average. Homes under notice of foreclosure sale orders were up 244% year-over-year versus the national average increase of 34%. To put it in perspective, Michigan had 3.3% of the nation’s housing stock in 2022 yet 5.4% of all homes in notice of foreclosure sale and 7.2% of all REO transactions. Year-over-year, REO transactions climbed 750% compared to 249% nationally.

The highs: With one in 137 homes in the foreclosure process, New Jersey ranks highest in the nation. The Garden State claims only 2.7% of the nation’s housing stock but a disproportionate number of foreclosures. In December 2022, New Jersey homes accounted for 9.5% of all initial foreclosure (lis pendens) filings, 3.9% of homes at the notice of foreclosure sale stage and 8.4% of REO transactions.

The lows: Despite these dramatic totals, New Jersey’s year-over-year foreclosure rates are up much less than most states. For instance, homes under a notice of foreclosure sale in December were down 30% year-over-year, while this rate is up 31.5% nationwide. Total New Jersey homes in foreclosure increased just 10.5% year-over-year, lower than the national average of 29.7%, likely due to their slow foreclosure process.

The (mostly) highs: Ohio ended the year with a foreclosure rate 1.6 times the national average. One in 260 Ohio housing units is in some stage of the foreclosure crisis. Year-over-year foreclosure rates jumped 46% in 2022 versus 29.7% nationally. With 5.2 million housing units, Ohio has just 3.7% of the national housing stock yet 6.8% of all homes in the lis pendens stage and 6.2% of all REO transactions.

The (mostly) highs: As of December 2022, one in 398 Pennsylvania housing units faced some stage of the foreclosure process, not far from the national average of one in 432 homes. The commonwealth’s other foreclosure statistics, however, are consistently above the national figures. Lis penden filings rose 33% year-over-year (25% nationally). Notices of foreclosure sales climbed 46.9% (31.5% nationally). And REO transactions soared by 449% with 741 foreclosure sales that went back to the servicer in December (249% nationally). Of the state’s 5.7 million housing units, 14,415 homes remained at some point in the foreclosure process in December, up 40.3% year-over-year compared with 29.7% nationally.

No highs, only lows: Rhode Island’s foreclosure rates rank considerably lower than both national averages and some of the state’s neighbors. Of the Ocean State’s 480,000 housing units, just one in 2,599 is in foreclosure, compared with one in 744 in Massachusetts and one in 374 in Connecticut. Rhode Island’s rate of year-over-year notice of foreclosure sales remained nearly unchanged with just a 1.4% increase. The state had just 41 REO transactions in December 2022, 206 for the year.

The (mostly) lows: Compared to its share of housing units – 2.7 million homes or 1.9% of the nation’s total – Wisconsin has far fewer homes in foreclosure than the country at large. One in 1,335 homes is in foreclosure versus one in 432 nationally. Year-over-year, the number of homes in foreclosure grew 33.9% versus the national average of 29.7%.

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