South Carolina – Last year, there was a slight increase in home foreclosures, a change experts attribute to the housing market stabilizing after the unpredictable period following COVID-19. This was noted by ATTOM, a company that analyzes real estate data. Some South Carolina metropolitan areas found themselves on the top of the list when it comes highest foreclosure activities in the nation. But experts believe that things might shift in an opposite direction sooner than we think.
In 2023, foreclosures, including notices of default, planned auctions, and banks taking back properties, went up by 10% from 2022 and 136% from 2021. But, they were still 30% lower than in 2019, before COVID-19 impacted the housing market.
Over 357,000 homes were in the process of foreclosure in 2023, representing 0.26% of all U.S. homes. This is a slight increase from the previous year but lower than the 0.36% in 2019 and much lower than the peak over ten years ago when 2.23% of homes were in foreclosure.
“We see the recent rise in foreclosure activity as a market correction rather than a cause for alarm. It signals a return to more traditional patterns after years of volatility,” ATTOM CEO Rob Barber said in a statement. “Our data suggests that while foreclosure activity may fluctuate, it’s unlikely to approach the highs seen in the last decade.”
Foreclosures could rise if certain economic trends shift
A spokesperson at ATTOM told Newsweek in a follow-up email that if certain economic trends shift, foreclosures could rise.
“If we see home prices decline, this could potentially lead to negative equity. And if unemployment rates continue to rise, we may see more and more people not able to make their mortgage payments,” said Jennifer von Pohlmann, a senior director of public relations at ATTOM.
In December, the number of homes going into foreclosure dropped by 6% from the previous month and was 2% lower than the same period last year. This information comes from ATTOM, which bases its reports on public records and foreclosure filings in over 3,000 counties nationwide.
Columbia had one the highest foreclosure activity in the nation
The states with the highest foreclosure rates in 2023 were New Jersey, Illinois, Delaware, Maryland, and Ohio. Cities with the most foreclosure activity included metropolitan areas of Atlantic City in New Jersey, Lakeland in Florida, Columbia in South Carolina, and Fayetteville in North Carolina.
Rob Barber, the CEO of ATTOM, mentioned that the foreclosure trends in 2023 show that the housing market is currently more unpredictable compared to its state during the pandemic.
“We foresee a market that is more reflective of broader economic trends, with foreclosure filings becoming a more predictable aspect of the housing landscape,” he said. “This shift offers a silver lining—the opportunity for investors, homeowners, and industry professionals to plan and strategize with greater confidence and insight.”
ATTOM’s representative explained that various factors, like the current high interest rates set by the Federal Reserve to control inflation, along with housing prices and unemployment rates, will influence future foreclosure trends.
Interest rates to blame for high foreclosure rates
Pohlmann pointed out that as interest rates rise, homeowners with adjustable-rate mortgages might face higher mortgage payments, which could lead to an increased risk of foreclosure.
In 2023, over 270,000 homes in the U.S. experienced the initiation of foreclosure by lenders, a 9% increase from 2022. States like California, Texas, and Florida had the highest numbers. Interestingly, bank repossessions dropped by 2% from 2022, with Michigan, Pennsylvania, and California seeing the most, as reported by ATTOM’s data.
