Recently, foreclosures have been a hot topic in the real estate market.
ATTOM discovered a substantial increase in nationwide foreclosure rates in May of this year. Adding up notices of default, repossession by banks, and auctions on the calendar, the U.S. Foreclosure Market Report found 35,196 American properties with foreclosure filings.
Foreclosure is never a good sign
In 2008 and 2009, foreclosure was a striking representation of the Great Recession. Why are there more foreclosures now?
Factors such as increased housing insurance premiums, roofing insurance, interest, inflation, and unemployment rates have greatly affected the number of foreclosures in the US real estate market.
When do homes become foreclosed?
Foreclosures typically begin three to six months after the initial missed mortgage payment, although the exact procedures vary from state to state.
Foreclosure in Florida Real Estate Market
Florida has the third-highest number of foreclosures in the country so far this year. One in every 2,470 housing units in Florida is currently in foreclosure.
According to the University of Central Florida’s Institute for Economic Forecasting, although Florida’s foreclosure filing numbers are nowhere near the catastrophic 2008 housing market crash, the state has seen a high cost of living without wages to match. The dramatic increase in housing prices and interest rates has added strain to household budgets.
Unemployment rates, foreclosure filings progressing after two years of government assistance, and other economic issues are the attributing factors to the rise in foreclosures in Florida.
Should you be scared?
No. However, it’s important to note that although foreclosures are on the rise, the current rates do not compare to the Great Recession.
Additionally, the Homeowner Assitance Fund program, which is part of the American Rescue Plan Act of 2021 was established to prevent foreclosures. The program’s goals are to prevent:
- Mortgage issues like delinquencies, defaults, or foreclosures
- Loss of power services or other home utilities
- Homeowners facing displacement and losing the ability to reside in their homes.
HAF provides $676,102,379 in financial assistance to the state of Florida through the United States Department of the Treasury. FloridaCommerce has been designated to manage and operate HAF on behalf of the state of Florida.
Watch this YouTube Short for our take on this situation:
We anticipate more foreclosures in the future because people purchased homes at high prices a year ago, and interest rates have risen. Additionally, the cost of homeowners insurance, flood insurance, and other expenses has become unaffordable for many Florida residents today.
However, rising foreclosures may create a buyer’s market due to the increased influx of distressed properties onto the market. This, in turn, would allow entry to individuals who are looking to invest in real estate.
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