U.S. foreclosure activity in 2023 increased from the previous year but was still below prepandemic levels, according to a report from real estate data provider ATTOM.
Foreclosure filings - default notices, scheduled auctions and bank repossessions - were reported on 357,062 properties in 2023, up 10% from 2022 and up 136% from 2021. But they were down 28% from 2019 before the pandemic rocked the market, according to ATTOM's Year-End 2023 U.S. Foreclosure Market Report. Filings in 2023 also were down 88% from a peak of nearly 2.9 million in 2010.
The 2023 foreclosure filings represent 0.26% of all U.S. housing units, up slightly from 0.23% in 2022 but down from 0.36% in 2019 and a peak of 2.23% in 2010.
"Reflecting on 2023, we see the recent rise in foreclosure activity as a market correction rather than a cause for alarm. It signals a return to more traditional patterns after years of volatility," ATTOM CEO Rob Barber said. "Our data suggests that while foreclosure activity may fluctuate, it's unlikely to approach the highs seen in the last decade."
ATTOM believes the market today reflects broader economic trends and foreclosure filings are becoming more predictable.
"This shift offers a silver lining - the opportunity for investors, homeowners and industry professionals to plan and strategize with greater confidence and insight," Barber said.
In 2023, lenders started the foreclosure process on 270,222 U.S. properties - an increase of 9% from 2022 and 193% from 2021. But starts were down 20% from 2019 and 87% from a peak of 2.1 million in 2009. The states with the most foreclosure starts were California, Texas, Florida, New York and Illinois.
Bank repossessions declined slightly from 2022, with lenders taking back 42,090 properties through foreclosures (REOs). That was down 2% from 2022, 71% from 2019 and 96% from a peak of 1 million in 201. States that saw the most REOs in 2023 were Illinois, Michigan, Pennsylvania, California and New York.
Properties foreclosed on in the fourth quarter had been in the process for an average of 720 days, a 7% decline from the previous quarter and down 16% from a year ago. States with the longest average time to foreclose were Louisiana, Hawaii, New York, Nevada and Kentucky.