As the cost of living in the in counties such as Broward County Florida keeps getting higher, more people are facing the risk of losing their homes through foreclosures.
In May, there was a 7% increase in foreclosure-related actions compared to April, and a 14% increase compared to the same month last year. This means that a total of 35,196 properties went through some stage of the foreclosure process, including default notices, scheduled auctions, and bank repossessions. These figures were reported by ATTOM, a real estate data group.
Lenders officially started the foreclosure process on 23,245 properties in May, which is a 4% increase from the previous month and a 5% increase from the previous year. The states with the highest number of new foreclosure starts in May were Florida, with 2,901 properties, followed by California with 2,451, and Texas with 2,286. Illinois and New York also had a notable number of foreclosure starts, with 1,358 and 1,287 respectively.
Rob Barber, the CEO of ATTOM, noted that the recent rise in foreclosure filings across the country confirms a trend that has been ongoing throughout the year. He mentioned that this increase could continue, and with foreclosure completions also rising significantly, there could be potential impacts on the housing market.
It’s important to mention that despite these increases, foreclosure rates are still similar to the levels before the pandemic. Analysts at Fitch, a financial information services company, have described this rise in distressed borrowers as a “normalization” process. During the pandemic, many people benefited from loan forbearances and government assistance, so the current situation could be a result of things returning to a more regular pattern.
However, the problem is that even though the economy is rebounding, people’s incomes have not fully recovered from the pandemic’s impact. This, combined with higher costs for goods and services, is putting individuals at a greater risk of falling behind on their payments. In fact, the average earnings of full-time workers in the U.S. have not reached their pre-pandemic levels when accounting for inflation.
In larger metro areas with over 1 million people, Jacksonville, Florida; Baltimore; Chicago; and Orlando, Florida, had the worst foreclosure rates. While the unemployment rate remains relatively low, which is a positive sign, it’s unlikely that the situation will reach the levels seen during the global financial crisis in 2007-2009.
In conclusion, the rising cost of living in the U.S. has led to an increase in foreclosures, with more people facing the risk of losing their homes. While this increase is notable, it’s not as severe as the situation during the financial crisis. However, the economic recovery has not fully translated to improved incomes for many individuals, which is contributing to the challenges people are facing in keeping up with their housing payments.