TAMPA, Fla. (WFLA) — For the first time in several weeks, the interest rate on 30-year fixed rate mortgages rose, though only by a fraction of a percent. Housing affordability remains a hot topic across the United States, with inventory, cost, and equity all serving as indicators amid ongoing inflation.
Real estate data analysis by ATTOM showed that despite the beginning of a housing market cooldown, foreclosures across the U.S. had increased month-by-month for nearly two years. When it comes to foreclosures, Florida had some of the highest levels in the past year, underscoring issues of availability and affordability.
For 21 months straight, ATTOM’s real estate data showed that there were 31,557 properties with foreclosure filings, a 36% increase from January 2022. From December 2022 to January 2023, foreclosures increased 2%.
Still, their data showed that it’s not entirely bad news.
”The uptick in overall foreclosure filings nationwide points toward a trend that may suggest more increased activity is on the horizon as we enter the new year,” ATTOM CEO Rob Barber said.” While both completed foreclosures and foreclosure starts have stalled slightly over the past month, the annual increase in overall activity seen over the past 21 months may indicate a more substantial trend that could continue into 2023.”
Mortgage lenders completed almost 4,000 repossessions in January, up 6% from December, but down 19% from the year before, according to ATTOM’s data. The company said it was the first annual decrease in completed foreclosures since June 2021.
Florida had the largest annual decreases in repossessions, down 53%, while states like Maryland, Michigan, New Jersey, and Texas all had smaller decreases, from 23% in Maryland to 14% in Texas.
Separately, Pennsylvania, and California all had increases in repossessions, with New York at the top with a 76% increase over the course of a year.
That said, the month-by-month outlook is a slightly different picture.
“States that saw the greatest number of foreclosures starts in January 2023 included: California (2,513 foreclosure starts); Texas (2,136 foreclosure starts); Florida (1,725 foreclosure starts); New York (1,375 foreclosure starts); and Illinois (1,309 foreclosure starts),” according to ATTOM.
Overall, January saw nearly 21,000 properties start foreclosure processes, just a 1% drop from December 2022, but a full 75% lower than the year before.
The ability to afford a home remains difficult, whether it’s purchase or retention. Freddie Mac, the federally-backed mortgage company, reported the 30-year fixed rate rose to 6.12%, up 0.03% from the week before.
“Following an interest rate hike from the Federal Reserve and a surprisingly strong jobs report, mortgage rates increased slightly this week,” Sam Khater, Freddie Mac’s Chief Economist, said. “The 30-year fixed-rate continues to hover close to six percent, and interested homebuyers are easing their way back to the market just in time for the spring homebuying season.”
Addressing the affordability concern remains an issue that both federal and state officials and lawmakers are trying to solve.
The Florida Legislature is considering new laws to create workforce housing, titled the “Live Local Act.” Multiple state lawmakers have said housing is their top priority in 2023, as well as calling it a crisis. Federally, different solutions and programs are being brainstormed or extended, building on relief options used during the COVID-19 pandemic.
The most recent Consumer Price Index shows housing costs were “the dominant factor in the monthly increase in the index for all items less food and energy” driving the national rate’s increase. Between rent and mortgages, or owners’ equivalent rent, costs were up 0.8% month-over-month for each. In the past year, the shelter cost index has risen 7.5%
Based on ATTOM’s data, SoFi reported Florida had the 12th highest number of foreclosures across the U.S., as of December 2022. SoFi said of the nearly 10 million housing units the state has, almost 2,500 had gone into foreclosure.
Additionally, Florida’s foreclosure rate is a reported one in every 3,964 homes.
SoFi said the number of foreclosures in the country had “drastically increased” through 2022 and that “with a total of 248,170 initiated, U.S. foreclosures rose a staggering 169 percent from the previous year.”
“The housing industry has been flipped on its head by high mortgage rates, which have caused a dramatic cooling of a once-hot market. As of January 12th, 2023, a typical 30-year fixed mortgage had an interest rate of 6.33%, a 0.15% decline from the previous week,” SoFi reported. “Nonetheless, these rates are already significantly lower than 2022, which peaked at a record-shattering 7.08% at the tail end of the year.”