Zombie Foreclosure Rate Continues to Decline in 3rd Quarter of 2024, Marking Lowest Level Since 2021
Industry Update
August 21, 2024
Source: ATTOM
ATTOM, a leading curator of land, property, and real estate data, today released its third-quarter 2024 Vacant Property and Zombie Foreclosure Report showing that 1.4 million (1,357,423) residential properties in the United States are vacant. That figure represents 1.3 percent, or one in 76 homes, across the nation – roughly the same as in the second quarter of this year.
The report analyzes publicly recorded real estate data collected by ATTOM — including foreclosure status, equity and owner-occupancy status — matched against monthly updated vacancy data. (See full methodology below).
The report also reveals that 222,934 residential properties in the U.S. are in the process of foreclosure in the third quarter of this year, down 6 percent from the second quarter of 2024 and down 29.3 percent from the third quarter of 2023. Foreclosure activity has declined over the past year following a surge in cases that hit after a nationwide moratorium on lenders pursuing delinquent homeowners, imposed during the Coronavirus pandemic, was lifted in the middle of 2021.
Among those pre-foreclosure properties, about 7,000 sit vacant as zombie foreclosures (pre-foreclosure properties abandoned by owners) in the third quarter of 2024. That figure is slightly above the number in the prior quarter, but down 20.2 percent from a year ago.
The latest count of zombie homes continues a long-term pattern of those properties representing only a tiny portion of the nation’s total housing stock – currently at just one of every 14,776 homes around the U.S. The ratio is about the same as the level of one in 14,724 in the prior quarter, but well down from one in 11,565 in the third quarter of last year, marking the lowest level since early 2021. Zombie foreclosures remain so rare that most local housing markets around the country have little or no issues with the blight and decay those properties can attract and spread.
The portion of pre-foreclosure properties that have been abandoned into zombie status, meanwhile, ticked up a bit, from 2.9 percent in the second quarter of 2024 to 3.1 percent in the current quarter.
“Zombie foreclosures continue to be a mere blip on the radar screen – one of many measures of the overall strength of the U.S. housing market. After some worries about a rise in abandoned homes following the end of the COVID-era foreclosure clampdown, they remain an anomaly throughout most of the country,” said Rob Barber, CEO for ATTOM. “One significant factor is the historically high levels of home equity. This provides homeowners who may be struggling with their mortgage payments a strong incentive to negotiate new payment plans, which in turn reduces the number of foreclosures. As a result, fewer owners are simply walking away from their properties like so many did after the Great Recession of the late 2000s.”
The hold-steady pattern of zombie properties during the third quarter comes as the nation’s housing market boom continues into its 13th year, reversing signs of a slowdown in 2023.
The nationwide median home value shot up 6 percent, year over year, in the Spring of 2024, reaching a new high of $365,000, according to ATTOM’s home sales data. It has increased every year since 2011, more than doubling during that time. Those gains have led to historic improvements in homeowner equity, which has resulted in almost 95 percent of owners with mortgages having at least some equity built up and half owing less than 50 percent of the estimated value of their properties.
For full report, please click the source link above.
