The number of U.S. homes in the process of foreclosure that are currently sitting empty — properties known as “zombie foreclosures” — barely changed between the first and second quarters of 2020, according to Attom Data Solutions’ most recent vacant property and zombie foreclosure report. As of the second quarter, about 7,650, or 3 percent, of the 258,000 homes in the process of foreclosure are currently sitting vacant, compared to 3.1 percent during the first three months of the year.
With the federal government-issued halt on foreclosures through the end of June in conjunction with the CARES Act, the unwavering rate of zombie foreclosures comes as no surprise.
“The foreclosure and zombie-property picture hasn’t changed much in the second quarter of this year as most lenders are barred from taking action against homeowners who are falling behind on their mortgages,” Todd Teta, chief product officer at Attom Data Solutions, said in a statement. “We are in a holding pattern across the country as long as the moratorium continues.”
The moratorium on foreclosures affects about 70 percent of all home loans in the U.S. As of Q2, about 1.5 million residential U.S. properties lie vacant, or 1.5 percent of all homes.
For its analysis, Attom collected foreclosure status, equity and owner-occupancy status and matched this data against monthly updated vacancy data for more than 98 million single-family homes and condos in metro areas with at least 100,000 residential properties and counties with at least 50,000 residential properties.
Todd Teta | ATTOM Data Solutions
The second quarter has shown a decline in total properties in the process of foreclosure by 8.8 percent to 258,024 properties compared to 282,767 properties in the first quarter.
States with a percentage of zombie foreclosures higher than the national average of 3 percent include Ohio (6.7 percent), New Mexico (5.5 percent), Indiana (4.8 percent), Illinois (4.7 percent) and Iowa (4.5 percent).
Those states with the lowest zombie foreclosure rates of 1.3 percent or less include South Dakota, Idaho, New Hampshire, Utah, New Jersey, Connecticut and Colorado.
New York, however, contains the highest number of zombie properties at 2,158, with Florida (1,136), Ohio (877), and Illinois (868) following the state’s lead.
Out of those metro areas with 100,000 residential properties or more, Peoria, Illinois (12.9 percent); Cleveland (11 percent); Syracuse, New York (8.9 percent); St. Louis (7.8 percent); and Honolulu (7.8 percent) contain the highest percentage of zombie foreclosures.
The lowest zombie foreclosure rates in metro areas with at least 500,000 residential properties include those in San Francisco (0.6 percent), Austin, Texas (0.8 percent), Philadelphia (1.1 percent), Phoenix (1.3 percent) and Boston (1.4 percent).
The second quarter has shown vacancy rates highest overall in Kansas, Tennessee, Mississippi and Oklahoma, all at 2.6 percent vacancy.
“At some point, that [foreclosure moratorium] will have to be lifted, so that banks can make their own decisions about whether to continue delaying foreclosures while the economy recovers,” Teta added. “When that will happen is unknown, but that’s the point when we will see if foreclosure activity will remain at very low levels or rise.”