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Putting Foreclosure Trends in Perspective

ATTOM’s May 2021 U.S. Foreclosure Market Report [1] has found there were a total of 10,821 U.S. properties with foreclosure filings—encompassing default notices, scheduled auctions or bank repossessions—down 8% from a month ago, but up 23% year-over-year. Foreclosure starts, which represent the initial notice of default, grew by 36% year-over-year.

The May 2021 U.S. Foreclosure Market Report shows that, nationwide, one in every 12,700 housing units had a foreclosure filing. States with the highest foreclosure rates in the month of May included:

"While the increase in foreclosure activity is significant, it's important to keep these numbers in perspective," said RealtyTrac EVP Rick Sharga [2]. "Last year's numbers were extraordinarily low due to the implementation of the foreclosure moratorium and the CARES Act mortgage forbearance program, so the year-over-year numbers look a lot more dramatic than they are. And May foreclosure activity actually declined compared to April."

Among the 220 metro areas with a population of at least 200,000, those with the highest foreclosure rates in May 2021 included:

Lenders began the foreclosure process on 5,909 properties in May 2021, down 7% from April 2021, and up 36% from a year ago. Counter to the national trend, states that had at least 100 foreclosure starts in May 2021 and saw the greatest monthly increase in foreclosure starts included:

Lenders repossessed 1,315 U.S. properties through completed foreclosures (REOs) in May 2021, down 15% from April’s totals, and down 54 percent from May 2020. Those states that had the greatest number of REOs in May 2021, included:

The number of U.S. homes in forbearance plans continues to decline, as this week, the Mortgage Bankers Association (MBA) reported [3] that approximately two million homeowners are currently in forbearance plans. In total, a 4.04% share of all mortgage volume is in a state of forbearance, marking the 15th consecutive week of decline on the forbearance front.

Another positive sign is the uptick in employment, with the U.S. Department of Labor reporting [4] initial unemployment claims 376,000 for the week ending June 5, a decrease of 9,000 from the previous week's unrevised level of 385,000, marking the lowest level for initial claims since March 14, 2020 when it was 256,000.