Even though mortgage interest rates are falling, completed foreclosures remain relatively steady, according to a DS News report.

The average rate for a 30-year mortgage fell 3 basis points from the previous week and were down more than 50 basis points from mid-October, according to a Bank Rate report.

Citing ATTOM Data’s 2023 U.S. Foreclosure Market Report, the DS News report said there was a total of 34,472 properties with a foreclosure filing against them. This figure includes default notices, scheduled auctions, or bank repossessions (REOs). The total figure is up more than 6 percent from 2022, yet down 6 percent on a month-over-month basis.

“Foreclosure filings continue to paint a concerning picture,” Rob Barber, ATTOMCEO, said in a company press release. “With foreclosure filings ranging from 31,557 in January 2023 to 34,472 in October 2023, it’s evident that challenges in the housing market persist. While we anticipate a likely decline in the coming months due to the holiday season and other seasonal patterns, we do foresee a continued uptick in 2024 as foreclosure filings make their way through the pipeline.”

According to ATTOM, one in every 4,051 housing units across the country had a foreclosure filing during October 2023. Lenders started the foreclosure process on 23,343 U.S. properties in October 2023, down 7 percent from last month but up 7 percent from a year ago.

The three states with the highest foreclosure rates were in the North: Delaware (one in every 2,432 housing units with a foreclosure filing); Ohio (1-in-2,492 housing units) and New Jersey (1-in-2,550 housing units).

Also in the top five were Maryland (1-in-2,565 housing units) and South Carolina (1-in-2,569 housing units).

The top five in highest rates was quite different than the states with the largest number of foreclosures in October — Texas (2,966 foreclosure starts); California (2,747 starts); Florida (2,319 starts); New York (1,405 starts); and Georgia (1,054 starts).

Expectations for 2024

Foreclosure numbers are likely to stay relatively steady for 2024.

“Foreclosure activity is still only at about 60 percent of pre-pandemic levels as we prepare to exit 2023, and isn’t likely to be back to 2019 numbers until sometime in mid-to-late 2024,” Rick Sharga, founder and CEO of CJ Patrick Company, said in a recent Forbes Advisor article.

Sharga credited the strength of the economy—currently we’re seeing low employment and steady wage growth—along with excellent loan quality and expanded financial relief offerings from mortgage servicers.

Strong increases in homeowner equity in the past few years has also kept foreclosures largely at bay. According to Sharga, about four-fifths of today’s homeowners have more than 20 percent equity in their property. So, while there may be more foreclosure starts in 2024, foreclosure auctions and lender repossessions should remain below 2019 levels.

Impact of COVID Moratorium End

Legal advisory firm Nolo, a wholly owned subsidiary of MH Sub I, LLC cites the end of most foreclosure moratoriums and other COVID-related foreclosure protection laws at the end of 2021, for the increase of foreclosure activity in the past two years, and expects this to be a contributing factor to rising foreclosure activity in 2024, a company blog said.

Also expected to contribute to rising foreclosure rates in 2024 are inflation and recession fears.

However, a “substantial” wave of foreclosures isn’t likely in 2024, the blog says, explaining: “Unlike during the mortgage crisis, most homeowners won’t go underwater on their mortgages, even if home prices decline. The majority have equity in their homes because housing prices have progressively gone up over the past few years. Even homeowners who recently purchased their properties at the peak of the housing market tend to have equity because most loans require a sizeable down payment.”

Therefore, homeowners facing financial hardships should be able to sell their homes to avoid foreclosure (and likely walk away with some cash) or work out a loss mitigation option with their loan servicer, according to Nolo.