These 10 cities are seeing the biggest jump in foreclosures as high home prices and property taxes bite

home foreclosure

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  • Foreclosures are surging in key pockets of the US housing market.

  • A analysis identified 10 cities where foreclosures were seeing the biggest jump.

  • Overall, foreclosures have surged 13% in the first half of 2023, compared to a year ago.

Foreclosures are surging, thanks to higher home prices and property taxes biting into homeowner finances.

To be sure, there is no nation-wide wave of foreclosures coming like during the Great Recession, and the recent uptick hasn’t been evenly spread across the housing market, according to a new analysis.

But foreclosure filings have surged in key pockets in the US, and identified 10 cities where activity has increased the most.

Atlantic City, New Jersey, saw the sharpest increase in June, with nearly 7 out of every 10,000 housing units facing foreclosure. That’s followed by Florence, South Carolina, with 6 of every 10,000 homes, and New Haven, Connecticut, with 5.6 of every 10,000 homes.

  1. Atlantic City, New Jersey, 6.8 out of 10,000

  2. Florence, South Carolina, 6 out of 10,000

  3. New Haven, Connecticut, 5.6 out of 10,000

  4. Baltimore, Maryland, 5.5 out of 10,000

  5. Mobile, Alabama, 5.3 out of 10,000

  6. Orlando, Florida, 5.1 out of 10,000

  7. Macon, Georgia, 4.8 out of 10,000

  8. Philadelphia, Pennsylvania, 4.8 out of 10,000

  9. Peoria, Illinois, 4.5 out of 10,000

  10. Modesto, California, 4.3 out of 10,000

Across the US, foreclosures have surged 13% in the first half of 2023 from a year ago, according to the real estate data provider ATTOM, with 1 out of every 752 homes facing default notices, scheduled auctions, or repossession.

The increase has partly been driven by the lifting in 2021 of the pandemic foreclosure moratorium — with stalled activity still catching up — as well as higher home prices, which have pushed up property taxes for some owners.

The average property tax on a single-family home rose 3% to $3,901 in 2022, up from the 1.8% increase recorded in 2021, ATTOM data shows.

“As property values ​​have exploded in some areas … property taxes have as well,” research analyst Hannah Jones said in a statement. “It can make these homes unaffordable even if the owner has a low mortgage rate.”

Although 90% of homeowners have a mortgage rate below 6%, the median home price in the US is 44% more expensive than before the pandemic, a separate Redfin analysis recently showed.

Home prices have stayed elevated for the past year as high mortgage rates have limited available housing supply on the market. Experts don’t expect the affordability picture to improve until mortgage rates fall back to the 5% range, which would free up more inventory for prospective buyers.

Read the original article on Business Insider