“Mansion Global” host Katrina Campins shares the latest in the real estate market on “The Bottom Line.”
Home foreclosures increased “noticeably” in January as Americans continue to grapple with the ongoing cost of living crisis.
That’s according to a new report published by real estate data provider ATTOM, which found that lenders foreclosed on 3,954 U.S. properties in January, an increase of 13% from the previous month. This is the first monthly increase in the number of completed foreclosures since July 2023.
The number of foreclosures increased by just 1% compared to the same period a year ago.
ATTOM CEO Rob Barber said: “We have observed a slight increase in the number of foreclosure filings, partially due to the progress of filings through the judicial system after the holidays.” “This may be a typical trend.” “However, other external factors may be at play, such as rising interest rates, inflation, changes in employment, and other market trends.
Why can’t I find a home for sale?
Rising home prices and mortgage rates are worsening home affordability across the country. (Andrew Caballero Reynolds/AFP via Getty/Getty Images)
The report also found that 37,679 properties had foreclosure filings (including notices of default, scheduled auctions, and bank foreclosures) filed in January, an increase of 10% from the previous month and a 5% increase from 2023. It was also shown that
The increases were even larger in some states. Michigan saw a 200% increase in completed foreclosures, Minnesota saw a 47% increase, and California saw a 43% increase. Pennsylvania saw a 36% increase, and Missouri saw a 34% increase.
Although the number of foreclosures is on the rise, it remains well below the levels recorded during the 2008 financial crisis.
But the problem could soon get worse as Americans struggle with soaring home prices, mortgage rates and property taxes.
Mortgage Calculator: See how much higher interest rates will cost you
The housing shortage only stimulates consumer demand, which keeps prices uncomfortably high. (David Paul Morris/via Bloomberg/Getty Images)
Housing affordability is at its worst in decades due to soaring home prices and mortgage rates. Together, the two would push the typical portion of the national average wage required for major homeownership costs to 33%.
There are several reasons for the affordability crisis.
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of federal reserve Thanks to an aggressive interest rate hike campaign, mortgage interest rates exceeded 8% last year for the first time in about 20 years. Interest rates have been slow to retreat, hovering around 7%, as higher-than-expected inflation data dashed investors’ hopes for an immediate rate cut.
The average interest rate on a 30-year fixed loan rose to 6.9% this week, well above the pandemic-era low of 3%, Freddie Mac reported.
Even though mortgage interest rates are nearly double what they were three years ago, home prices have remained largely unchanged. It is mainly There is a lack of available housing It is for sale. Sellers who had low mortgage rates before the pandemic began are reluctant to sell, leaving eager buyers with few options.
