- Florida had the most foreclosures in May with 2,901 home confiscations
- Inflation figures and rising interest rates are blamed for cost of living squeeze for Americans
Home foreclosures across the country were up 7 percent last month, and up 14 percent from a year ago as the cost of living continues to bite.
Foreclosure-related filings, including default notices scheduled auctions and bank repossessions, surged to 35,196 properties according to new data from ATTOM.
Florida had the most foreclosures in May with 2,901 home foreclosures started.
This was followed by California, with 2,451 foreclosures started, and Texas, where 2,286 property confiscations were begun.
ATTOM’s CEO, Rob Barber, said in a statement that ‘the recent increase in foreclosure filings nationwide indicates a trend that has been observed throughout the year, and what we have expected to occur.’
Barber explained that the ‘upward trajectory suggests the possibility of continued heightened activity, and with foreclosure completions seeing the largest monthly increase this year, we will continue to monitor the potential impacts this may have on the housing market.’
Despite the increase in foreclosure filings, Fitch analysts argue it is just a ‘normalization’ process following the very low levels during the pandemic as consumers benefitted from loan forbearances and government assistance.
However, inflation is still running hot with the latest figures from the US Bureau of Labor Statistics showing the rate of annual inflation is now 4.9 percent.
Despite falling from its peak of 9.1 percent in June 2022 inflation is still putting significant pressure on household finances, likely contributing to the uptick in families who can no longer keep up with mortgage payments.
When adjusted for inflation US workers’ incomes remain below their pre-pandemic highs.
The cost of living in Florida has surged since the pandemic, the state with the highest level of foreclosures last month, with real hourly earnings in the state falling from $25.12 in February 2020 to $24.82 to this April, according to analysis by NBC News.
Interest rates have also risen rapidly in the last year with the federal reserve’s latest hike in May brining the base rate to 5.25 percent, putting pressure on mortgage rates after a decade of ultra low rates.
The Fed has hinted that rates will have to remain higher for longer to keep inflation in check.
‘It’s likely that foreclosure filings will keep rising, but nothing like we saw back when the bubble burst in 2008,’ Barber added.