U.S. Vacant Homes and Zombie Foreclosures: New Insights

Vacant homePhoto by Christian Troi Diaz on Pexels.com

IRVINE, CA — In the latest analysis by ATTOM, the third-quarter 2024 Vacant Property and Zombie Foreclosure Report reveals the current state of vacant properties and foreclosure activity in the United States. Approximately 1.4 million homes, or 1.3 percent of residential properties nationwide, are sitting vacant. This level remains consistent with previous quarters, indicating a stable trend in housing vacancies.

The report also sheds light on foreclosure activities. It notes a decline in the number of properties undergoing foreclosure, which now stands at 222,934. This marks a 6 percent decrease from the second quarter and a notable 29.3 percent drop from the same period last year. This reduction follows the lifting of a foreclosure moratorium linked to the COVID-19 pandemic.

Zombie foreclosures, which occur when homeowners vacate properties before the foreclosure process is complete, remain relatively rare. The report identifies approximately 7,000 such properties in the third quarter. While this figure shows a slight increase from the previous quarter, it represents a 20.2 percent decline compared to last year.

Rob Barber, CEO of ATTOM, commented, “Zombie foreclosures continue to be a mere blip on the radar screen – one of many measures of the overall strength of the U.S. housing market.” He emphasized that high levels of home equity provide struggling homeowners with more options to renegotiate payments, reducing the likelihood of abandoning their properties.

The report highlights a continuing boom in the housing market, now in its 13th year. The national median home value has reached $365,000, reflecting a 6 percent increase from the previous year. This rise in home values has significantly boosted homeowner equity, with 95 percent of mortgage holders possessing some equity in their homes.

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The vacancy rate for residential properties remains steady at 1.31 percent, sustaining consistency over the last ten quarters. Oklahoma and Kansas show the highest vacancy rates, while New Hampshire and Vermont feature the lowest.

Further findings in the report indicate that among major metropolitan areas with at least 100 properties in foreclosure, Peoria, IL, and Cedar Rapids, IA, have the highest rates of zombie foreclosures. The data also shows that investor-owned homes have a vacancy rate of 2.6 percent nationwide.

The current state of the housing market, as depicted in the ATTOM report, highlights a robust landscape with minimal impact from zombie foreclosures. This stability is supported by strong home values and substantial equity, allowing for more resilience against foreclosure pressures. As the market continues to evolve, these factors play a crucial role in maintaining its overall health and strength.

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