February foreclosures were at a record low before the virus hit.
Just-released foreclosure numbers are likely to be the calm before the storm.
The latest foreclosure and mortgage delinquency data for February shows the lowest volume of forced home sales in decades. But that was before millions of Americans were thrown out of work and rising levels of illness from the pandemic made it harder for borrowers to make their payments.
Nationwide foreclosure filings were at the lowest point on record in February, according to a report by Attom Data Solutions.
“Foreclosure activity across the United States hit new lows in February, yet another marker of the nation’s long housing boom,” Attom Data’s Todd Teta said in the report. “However, as with just about anything connected to the housing market right now, the foreclosure situation is now totally in flux because of the ever-evolving coronavirus pandemic.
“Many lenders have suspended foreclosure proceedings, so the numbers will most likely continue to drop in the coming months. But after that, we may see an uptick in foreclosures as a result of dramatic economic impacts, such as more homeowners losing their jobs and falling behind on mortgage payments.”
Nationwide, lenders repossessed 10,469 U.S. properties in February — an 8% drop from the same month in 2019.
In Dallas-Fort Worth, just 635 homes were identified as in default and starting the foreclosure process in February, almost 13% fewer than a year earlier.
U.S. foreclosure starts in February were up 3% from the previous month. Texas had one of the biggest percentage jumps, increasing 28%.
Foreclosures were up 63% in Nevada, 49% in Oregon and 47% in Washington, according to Attom Data.
Frank Nothaft, chief economist with CoreLogic, expects the number of mortgage defaults to rise.
“It will definitely happen,” Nothaft said. “We have seen it happen in every single recession the U.S. economy goes into.
“The question will be how severe this recession is and what kind of forbearance programs are in place to lighten the hurt on homeowners.”