The number of foreclosure filings in the United States rose by 5 percent in February over the prior month as mortgage rates remained elevated, according to property data company ATTOM.
“February’s rise in foreclosure filings suggests evolving market pressures,” said Rob Barber, CEO at ATTOM.
“While some increase may reflect seasonal trends, the uptick in foreclosure starts both month-over-month and year-over-year signals potential shifts. We’ll continue monitoring how economic factors influence foreclosure activity moving forward.”
One in every 4,395 housing units nationwide filed for foreclosure in February. The state with the highest rate was Delaware, followed by Illinois, Nevada, New Jersey, and South Carolina.
High mortgage costs can push up monthly mortgage payments for some homeowners, forcing people struggling financially into foreclosure. There is a possibility that such activity continues to rise for the year given mortgage rates are unlikely to drop significantly any time soon.
Last month, the Fannie Mae’s Home Purchase Sentiment Index fell year-over-year for the first time in almost two years, largely due to fewer consumers being optimistic about mortgage rates.
“The decline in sentiment was further impacted by consumers’ growing concerns about their own personal financial situations.”
In February, Barber cited interest rates, employment shifts, inflation, and other market dynamics as factors to watch out for to determine the trajectory of foreclosures this year.
Another indicator of potential increase in foreclosures is the delinquency rate on mortgages. Data from the Federal Reserve Bank of New York shows that delinquencies among mortgage holders were rising. Mortgage delinquencies can potentially lead to property foreclosures.
In the fourth quarter of 2023, 0.82 percent of mortgage debt was identified as flowing into serious delinquency, which rose to 1.09 percent in the fourth quarter of 2024.
“Under the new law, foreclosure sales in Illinois can be conducted online, in-person, or both, but the method must be disclosed in the notice of sale. Further, the law sets requirements for a proper online sale, including allowable fees, registration and identification requirements, and bidding procedures.”