Single family home foreclosure chart over past twenty years

[GON]

Chart of single-family home foreclosures over past 20 years.

I few comments- finding a foreclosure over the past few years has been difficult/ rare. I use to see foreclosures listed for sale while looking at all available single family homes. Today, foreclosure listings are rare, and most of the very few listed are actually scams to get a person's information. With the significant rise in housing costs over the past five years- a mortgage payment from a mortgage originated before 2020 is likely much less than a rent payment at current rental market prices. Finally, the few foreclosures I have come across are super trashed/ neglected homes. I suspect the vast majority of homes at risk for foreclosure is being sold prior to the foreclosure, as the home more likely than not has significant equity.

 

[Rmay635703]

Sheriff’s sales were rare but during the pandemic Tax deed sales were still moderately common, albeit very poor quality and overpriced compared to the past.

As we have come out of the pandemic the classic Freddy/Franny have had skyrocketing delinquency rates (we have moved from 0.5% to around 3% in a relatively short time)
but they aren’t moving to foreclosure as they appear to have redefined the point they pull the trigger.

This is similar to corporate real estate, immense delinquency but nobody is in any hurry to get property auctioned.

In my area the amount of county owned land has grown but again, very few tax deed sales to coincide with this which is atypical

 

[BMWTurboDzl]

Sheriff’s sales were rare but during the pandemic Tax deed sales were still moderately common, albeit very poor quality and overpriced compared to the past.

As we have come out of the pandemic the classic Freddy/Franny have had skyrocketing delinquency rates (we have moved from 0.5% to around 3% in a relatively short time)
but they aren’t moving to foreclosure as they appear to have redefined the point they pull the trigger.

This is similar to corporate real estate, immense delinquency but nobody is in any hurry to get property auctioned.

In my area the amount of county owned land has grown but again, very few tax deed sales to coincide with this which is atypical

Do you have more recent numbers? Fannie Mae is reporting .53%?
https://seekingalpha.com/news/4391709-fannie-mae-s-guaranty-book-of-business-slips-0_3-in-november

 

[Dave Hess]

I’ve mentioned before there’s a lot more foreclosures on the horizon within the next 2 years and an alarming amount of Americans are cash poor. Cost of living getting more and more difficult for the average person.

If you look at the increasing vehicle repos, credit car debt / consumer debt, savings rate at almost all time lows, inflation causing people to rely on credit cards to buy the basics, etc….

You would be surprised how cash poor people are even in more upscale communities / neighborhoods across the USA.

https://wolfstreet.com/

.

 

[alarmguy]

That chart is amazing in the OP and a good point by @GON. It’s rare if ever that I see a foreclosure anymore. I actually forgot that it used to be fairly common to run across them.
Heck I forgot they exist.

My son bought one around 8 years ago.
My daughter intensely house hunting right now in VA and I haven’t seen one foreclosure listed now that I think about it.

 

[supton]

Over the past year I've seen a few articles about how the financial crisis of 2008 was not so much from sub-prime borrowers defaulting but rather people with investment properties going under--they had bought to flip, then got holding the bag when the bottom fell out. Regardless of mechanism: is this trend merely moving back to what was the norm before the massive run-up in real estate value that the 2000's ushered in?

I'm also wondering, how many default within a handful of years of buying a house? as opposed to after year 15 or whatever. If home buying shifts to only those who can afford it (higher barrier to entry), might that lead to less defaults with time? I mean, generally speaking, one's income goes up with time, so if one can score a 30 year fixed APR, then hopefully with time it becomes "less expensive" to tote the note. What that might do to the future, no idea.

 

[SC Maintenance]

There are a million programs put in place after 2008 to help people in foreclosure. The servicer is obligated to offer them. Banks don't hold the risky mortgages either - VA, Fannie, Freddie do. There in no rush to foreclose.

If you haven't bought in the last 2 years you likely have significant equity anyway - so if you can't make the nut you sell and move on. You can't have a significant foreclosure level without falling house prices.

 

[SC Maintenance]

This is similar to corporate real estate, immense delinquency but nobody is in any hurry to get property auctioned.

I listened to a podcast - St. Louis I think, where banks foreclosed on a bunch of CRE - or maybe the owners just mailed them the keys, and now the city is going after the banks for upkeep, security (keeping vagrants out), etc. Hard to fight city hall.

If the banks take possession and then auction, they have to take the loss on their books, if anyone will buy which in many cases no one wants them, so they just let them sit - just like they didn't foreclose on a lot of residential real estate in 2008 / 2009.

Or so they said?

 

[Tharber]

CRE notes are vastly different. A CRE loan comes due in typically 7 or 10 yrs, then they must be refinanced. If there is a note on the property, most of the time the banks have an assignment of rents, meaning the tenant pays the bank direct and bypasses the owner.

 

[billt460]

....... If you haven't bought in the last 2 years you likely have significant equity anyway - so if you can't make the nut you sell and move on. You can't have a significant foreclosure level without falling house prices.

This ^^^^^^^^^^^

If the bulk of the homes in my area purchased in the last several years, lost 75% of their value overnight, they would still be worth more than what people paid for them.

This was the exact opposite of the 2008 mess, where people had all but zero equity, and were blatantly overpaying by borrowing to the hilt, because they all thought it would never end.

 

[RhondaHonda]

There were also a lot of investor cash out refis going in 2008 which helped contribute to the problem.

Many local banks here that service their own loans have contacts to sell the note to local investors and let them deal with it. I expect an uptick in foreclosures but nothing like we saw in the past as the circumstances are much different.

 

[CKN]

There were also a lot of investor cash out refis going in 2008 which helped contribute to the problem.

Many local banks here that service their own loans have contacts to sell the note to local investors and let them deal with it. I expect an uptick in foreclosures but nothing like we saw in the past as the circumstances are much different.

Don't know how one can rational more foreclosures when people want to buy your house you can no longer afford. There is still a shortage of places to live/houses to buy.