ZOMBIE FORECLOSURE RATE CONTINUES TO DECLINE IN THIRD QUARTER OF 2024, MARKING LOWEST LEVEL SINCE 2021

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Aug 22, 2024, 00:01 ET

Abandoned Homes in Foreclosure Down 20 Percent Annually; Only One in 14,800 U.S. Homes Sit Empty in Foreclosure, Matching Three-Year Low; Zombie-Property Trends Come Amid Decline in Lenders Going After Delinquent Homeowners

IRVINE, Calif., Aug. 22, 2024 /PRNewswire/ -- ATTOM, a leading curator of land, property, and real estate data, today released its third-quarter 2024 Vacant Property and Zombie Foreclosure Report showing that 1.4 million (1,357,423) residential properties in the United States are vacant. That figure represents 1.3 percent, or one in 76 homes, across the nation – roughly the same as in the second quarter of this year.

The report analyzes publicly recorded real estate data collected by ATTOM — including foreclosure status, equity and owner-occupancy status — matched against monthly updated vacancy data. (See full methodology below).

The report also reveals that 222,934 residential properties in the U.S. are in the process of foreclosure in the third quarter of this year, down 6 percent from the second quarter of 2024 and down 29.3 percent from the third quarter of 2023. Foreclosure activity has declined over the past year following a surge in cases that hit after a nationwide moratorium on lenders pursuing delinquent homeowners, imposed during the Coronavirus pandemic, was lifted in the middle of 2021.

Among those pre-foreclosure properties, about 7,000 sit vacant as zombie foreclosures (pre-foreclosure properties abandoned by owners) in the third quarter of 2024. That figure is slightly above the number in the prior quarter, but down 20.2 percent from a year ago.

The latest count of zombie homes continues a long-term pattern of those properties representing only a tiny portion of the nation's total housing stock - currently at just one of every 14,776 homes around the U.S. The ratio is about the same as the level of one in 14,724 in the prior quarter, but well down from one in 11,565 in the third quarter of last year, marking the lowest level since early 2021. Zombie foreclosures remain so rare that most local housing markets around the country have little or no issues with the blight and decay those properties can attract and spread.

The portion of pre-foreclosure properties that have been abandoned into zombie status, meanwhile, ticked up a bit, from 2.9 percent in the second quarter of 2024 to 3.1 percent in the current quarter.

"Zombie foreclosures continue to be a mere blip on the radar screen – one of many measures of the overall strength of the U.S. housing market. After some worries about a rise in abandoned homes following the end of the COVID-era foreclosure clampdown, they remain an anomaly throughout most of the country," said Rob Barber, CEO for ATTOM. "One significant factor is the historically high levels of home equity. This provides homeowners who may be struggling with their mortgage payments a strong incentive to negotiate new payment plans, which in turn reduces the number of foreclosures. As a result, fewer owners are simply walking away from their properties like so many did after the Great Recession of the late 2000s."

The hold-steady pattern of zombie properties during the third quarter comes as the nation's housing market boom continues into its 13^th year, reversing signs of a slowdown in 2023.

The nationwide median home value shot up 6 percent, year over year, in the Spring of 2024, reaching a new high of $365,000, according to ATTOM's home sales data. It has increased every year since 2011, more than doubling during that time. Those gains have led to historic improvements in homeowner equity, which has resulted in almost 95 percent of owners with mortgages having at least some equity built up and half owing less than 50 percent of the estimated value of their properties.

Zombie foreclosures mostly unchanged quarterly around U.S. while down annually

A total of 7,007 residential properties facing possible foreclosure have been vacated by their owners nationwide in the third quarter of 2024, up 0.9 percent from 6,945 in the second quarter of 2024 but down from 8,782 in the third quarter of 2023. The number of zombie properties stayed the same quarterly or went up slightly in 26 states – usually increasing by less than 20. The number declined in 24 states.

The biggest percent decreases from the third quarter of 2023 to the third quarter of 2024 in states that had at least 50 zombie homes a year ago are in Connecticut (zombie properties down 79 percent, from 87 to 18) Oklahoma (down 78 percent, from 199 to 43), Iowa (zombie properties down 78 percent, from 290 to 64), North Carolina (down 74 percent, from 191 to 50) and New Mexico (down 74 percent from 95 to 25).

The only annual increases among states that had at least 50 zombie foreclosures in the third quarter of 2023 have come in Florida (zombie properties up 64 percent, from 1,199 to 1,961), Texas (up 63 percent, from 112 to 183) and New Jersey (up 12 percent, from 205 to 230). Georgia's number has stayed the same, at 85.

Overall vacancy rates also about the same

The vacancy rate for all residential properties in the U.S. has remained virtually the same for 10 quarters in a row, hovering around 1.3 percent. The latest figure of 1.31 percent (one in 76 properties) is up slightly from 1.26 percent in both the second quarter of 2024 and the third quarter of last year.

States with the highest vacancy rates for all residential properties are Oklahoma (2.36 percent, or one in 42 homes, during the third quarter of this year), Kansas (2.32 percent, or one in 43), Missouri (2.11 percent, or one in 47), Alabama (2.09 percent, or one in 48) and West Virginia (2.08 percent, or one in 48).

Those with the smallest overall vacancy rates are New Hampshire (0.35 percent, or one in 282 homes), Vermont (0.41 percent, or one in 243), New Jersey (0.43 percent, or one in 231), Idaho (0.5 percent, or one in 201) and Utah (0.65 percent, or one in 153).

Other high-level findings from the third quarter of 2024:

Among 170 metropolitan statistical areas in the U.S. with at least 100,000 residential properties in the third quarter of 2024, those with at least 100 properties facing possible foreclosure and the highest zombie foreclosure rates are Peoria, IL (23 percent of properties in the foreclosure process are vacant); Cedar Rapids, IA (10.9 percent); Youngstown, OH (8.1 percent); Wichita, KS (8 percent) and St. Louis, MO (7.5 percent).
Aside from St. Louis, the highest zombie-foreclosure rates in major metro areas with at least 500,000 residential properties and at least 100 homes facing foreclosure in the third quarter of 2024 are in Cleveland, OH (7.4 percent of homes in the foreclosure process are vacant); Pittsburgh, PA (5.8 percent); Indianapolis, IN (5.7 percent) and San Antonio, TX (5.2 percent).
Among the 36 million investor-owned homes throughout the U.S. in the third quarter of 2024, about 939,000 are vacant, or 2.6 percent. The highest levels of vacant investor-owned homes are in Indiana (5.5 percent vacant), Oklahoma (4.6 percent), Alabama (4.4 percent), Missouri (4.3 percent) and Kansas (4.2 percent).
Among the roughly 12,000 foreclosed, bank-owned homes in the U.S. during the third quarter of 2024, 12.9 percent are vacant. In states with at least 50 bank-owned homes, the largest vacancy rates are in Kansas (24.1 percent vacant), New Mexico (23.4 percent), Ohio (23.4 percent), Indiana (22.5 percent) and Oregon (20 percent).
The highest zombie-foreclosure rates in U.S. counties with at least 500 properties in the foreclosure process during the third quarter of 2024 are in Broome County (Binghamton), NY (15.5 percent of homes in the foreclosure process are vacant); Cuyahoga County (Cleveland), OH (7.9 percent); Pinellas County (St. Petersburg), FL (7.3 percent); Marion County (Indianapolis), IN (7.3 percent) and Erie County (Buffalo), NY (6.8 percent).
Among zip codes with enough data to analyze, 89 of the top 100 where zombie properties represent the largest portions of all homes are in New York, Florida and Illinois. The largest portions are in zip codes 61605 in Peoria County, IL (one in 134 homes); 32206 in Duval County (Jacksonville), FL (one in 238); 13350 in Herkimer County, NY (one in 239 homes); 61603 in Peoria County, IL (one in 241) and 10993 in Rockland County (West Haverstraw), NY (one in 287).

Report Methodology

ATTOM analyzed county tax assessor data for 103.5 million residential properties for vacancy, broken down by foreclosure status and owner-occupancy status in the third quarter of 2024. Only metropolitan statistical areas with at least 100,000 residential properties, counties with at least 50,000 residential properties and zip codes with at least 1,000 residential properties were included in the analysis.

About ATTOM
ATTOM provides premium property data to power products that improve transparency, innovation, efficiency, and disruption in a data-driven economy. ATTOM multi-sources property tax, deed, mortgage, foreclosure, environmental risk, natural hazard, and neighborhood data for more than 155 million U.S. residential and commercial properties covering 99 percent of the nation's population. A rigorous data management process involving more than 20 steps validates, standardizes, and enhances the real estate data collected by ATTOM, assigning each property record with a persistent, unique ID — the ATTOM ID. The 30TB ATTOM Data Warehouse fuels innovation in many industries including mortgage, real estate, insurance, marketing, government and more through flexible data delivery solutions that include ATTOM Cloud, bulk file licenses, property data APIs, real estate market trends, property navigator and more. Also, introducing our newest innovative solution, making property data more readily accessible and optimized for AI applications– AI-Ready Solutions.