Zombie foreclosures are those on homes that have no residents. Even though the figure in the United States is small, just over 1.3 million houses were vacant in the final quarter of last year. Zombie foreclosures were a much smaller number at 7,722. The city with the highest zombie foreclosure rate was Wichita, Kansas, at 12.7% of the foreclosures were houses that were vacant.
[in-text-ad]
The data was provided by real estate research firm ATTOM in its fourth-quarter 2022 Vacant Property and Zombie Foreclosure Report. Rick Sharga, executive vice president of market intelligence at ATTOM, said, “The count of zombie properties has grown in each of the last three quarters.” However, he did say that low vacancy rates made the zombie foreclosure picture better. “And with demand from both traditional homebuyers and investors still relatively strong, and the inventory of homes for sale still very low, vacancy rates for residential homes is about as low as it’s ever been,” Sharga added.
Wichita was followed by Peoria (9.9%), Syracuse (8.2%), Toledo (7.8%) and Cleveland (7.1%). It is no accident that four out of five of the cities with the top rates are poor metropolitan areas in the old industrial Midwest. All have high poverty rates and low median household incomes. All have a high percentage of the population that is Black.
It is unlikely that the zombie foreclosure rate, and the foreclosure rate in general, will hit the level of the 2008-2009 housing crisis that was part of the Great Recession. During that period, hundreds of thousands of U.S homes went into foreclosure. The landscape was littered with homes with variable rate subprime mortgages that owners could not afford.
24/7 Wall St.The fact that the current housing crisis will not be as bad as it was in 2008-2009 does not mean it will not be a severe problem for homeowners. Home price increases have been so substantial that a drop in home prices will strip away billions of dollars in home equity. More mortgages will be underwater. Home loans will become a bigger burden as well, as inflation eats into income.
Zombie mortgages as a large part of the housing market may never return. That does not mean the housing market is healthy.
Want to Retire Early? Start Here (Sponsor)
Want retirement to come a few years earlier than you’d planned? Or are you ready to retire now, but want an extra set of eyes on your finances?
Now you can speak with up to 3 financial experts in your area for FREE. By simply clicking here you can begin to match with financial professionals who can help you build your plan to retire early. And the best part? The first conversation with them is free.
Click here to match with up to 3 financial pros who would be excited to help you make financial decisions.
Have questions about retirement or personal finance? Email us at [email protected]!
By emailing your questions to 24/7 Wall St., you agree to have them published anonymously on a673b.bigscoots-temp.com.
By submitting your story, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.
Latest from 24/7
