Is The US About To See A Rise In Foreclosures After Surge In September?

Foreclosures in the U.S. are ticking upward as programs designed to help homeowners stay in place during the COVID-19 pandemic begin to end.

On Thursday, mortgage data firm ATTOM released a report on mortgage foreclosures for the third quarter of 2021. It showed there were 45,517 U.S. properties with foreclosure filings on record, an increase of 34% from the second quarter, and up 68% from the same period last year. In September, ATTOM found 19,609 filings which is 24% higher than in August and 102% higher than in September 2020.

Since the start of the pandemic, the U.S. government and private sector initiated a number of programs that would cut down on the number of foreclosures.

This was done to help people stay safe during the peak of infections last year, but delinquencies on mortgage payments and other loans soon began to go up as the pandemic wore on.

ATTOM estimates that one in every 7,008 properties had a foreclosure filing nationwide. The states with the highest concentration of foreclosures were identified as Florida, Illinois, Delaware, Nevada and New Jersey.

Despite seeing some worrying increases in the number of homes now being foreclosed on, it was in many ways expected as the housing market returns closer to normal. The U.S. government has been cutting back on the number of assistance programs it introduced to combat COVID-19 as the economy begins to ease through a recovery.

The eviction moratorium initiated by former President Donald Trump’s administration came to an end in September. President Joe Biden attempted to salvage it, but the courts sided with landlords who took their disagreements all the way up to the U.S. Supreme Court which ruled in their favor.

Many residents have also struggled to access rental assistance programs that would have helped them make payments as several states lag behind in distributing funds allocated for this by Congress in March.

Even though the number of foreclosures has gone up, they remain well below pre-pandemic levels. Rick Sharga, executive vice president at RealtyTrac, which is owned by ATTOM, said that the current rate of foreclosures will still put 2021 foreclosure numbers on track to being lower than in the years before the pandemic.

“September foreclosure actions were almost 70% lower than they were prior to the COVID-19 pandemic in September of 2019, and Q3 foreclosure activity was 60% lower than the same quarter that year,” he said, adding that even if numbers go up by the end of the fourth quarter, “we’ll end the year significantly below what we’d see in a normal housing market.”