Foreclosure Filings Rise: Homeowners Caught In Storm Of Financial Uncertainty

Foreclosure filings have seen an uptick, signaling potential distress for homeowners amid ongoing financial volatility.

The number of properties with foreclosure filings in January is up 5% compared to a year ago and 10% from December, according to real estate data provider ATTOM's January 2024 U.S. Foreclosure Market Report. The report shows there were a total of 33,270 foreclosure filings — default notices, scheduled auctions or bank repossessions.

"We observed a slight uptick in foreclosure filings, which may be partially attributed to the typical post-holiday progression of filings through the legal system," ATTOM CEO Rob Barber said. "However, other external factors may be at play such as escalating interest rates, inflation, employment shifts and other market dynamics. We remain vigilant in monitoring these trends to understand their full impact on foreclosure activity."

Foreclosure completions surged in 19 states. In January, lenders repossessed 3,954 properties through completed foreclosures, marking a 1% increase from the previous year and a 13% rise from December. It's the first month-over-month increase in completed foreclosures (REOs) since July.

States experiencing the most substantial monthly increases in REOs include Michigan, witnessing a 200% surge, followed by Minnesota with a 47% increase, California with a 43% rise, Pennsylvania with a 36% uptick and Missouri with a 34% climb.

Among the 224 regions with a population of at least 200,000, cities with the highest numbers of REOs included Detroit with 609, followed by Chicago with 194, New York City with 163, Philadelphia with 107 and San Francisco with 107.

Foreclosure rates across the United States remained concerning, with one in every 4,236 housing units experiencing a filing nationwide. Leading the pack in foreclosure rates were Delaware, where one in every 2,269 housing units faced a foreclosure filing, followed by Nevada with one in every 2,272 and Indiana with one in every 2,499.

Foreclosure initiations surged monthly and yearly as lenders started proceedings on 21,770 properties in January — a 6% increase from the previous month and a 5% rise compared to the same period a year ago.

Leading the tally of states with the highest number of foreclosure starts in January are California, which saw 2,719, followed by Texas with 2,613, Florida with 2,330, New York with 1,341 and Illinois with 763.

Start generating passive income through real estate

Check out these featured investments from Benzinga's Real Estate Offerings Screener.

In major metropolitan statistical areas with populations of at least 200,000, New York led with 1,470 foreclosure initiations, trailed by Houston with 1,015, Los Angeles with 817, Miami with 804 and Chicago with 763.

Read Next:

• Investing in real estate just got a whole lot simpler. This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, and you only need $100.
• Passive income investments are one of the most trusted methods for riding out a recession, so it's no surprise that people are turning to this multifamily portfolio fund that's targeting an 8% cash yield. 
• Ken Griffin says Miami will take New York's place as the U.S. Financial Capital. Here's how you can invest in the city with as little as $500 before that happens.