Zombie foreclosures are inching up as people who can no longer afford their homes abandon them.
The number of vacant homes in foreclosure, or zombie foreclosures, has risen for the sixth consecutive quarter, according to new data from ATTOM.
Year-over-year, zombie foreclosures are up 13.9%. Currently, 8,800 foreclosures are sitting empty across the country.
“Zombie foreclosures again are ticking up a tiny bit this quarter, tracking along with a small rise in overall foreclosure activity around the country. That’s to be expected, as a handful of homeowners who can’t catch up on overdue mortgage payments just walk away from their properties,” said Rob Barber, ATTOM CEO.
But these foreclosures remain just one in 11,600 of all homes nationwide, abating fears of a growing crisis. In fact, the number of homes sitting empty remained unchanged quarter-over-quarter at 1.3%, or one in 79 homes.
This is good news for homeowners in the surrounding neighborhoods. Unkempt homes ruin property values for nearby houses, impacting their equity and personal wealth. In some cases, vacancies even increase insurance premiums for nearby homeowners because they make neighborhoods appear unstable.
“Abandoned properties pose almost none of the blight threats they brought a decade ago when far more homeowners were throwing in the towel after the Great Recession of the late 2000s,” Barber added.
Historically high home equity protects many people from foreclosure, as they can typically sell for a profit before anything else. But ATTOM warns that if the market swings south, homeowners in lower-end markets are the most likely to be impacted. Poor families in these areas have experienced price appreciation due to the housing boom, but overall have fewer resources to deal with foreclosure.
The biggest increases from Q2 to Q3 in states with at least 50 zombie properties are in Missouri (zombie properties up 51%, from 35 to 53), Maryland (up 22%, from 188 to 229), Oklahoma (up 15%, from 173 to 199), Connecticut (up 13%, from 77 to 87) and Pennsylvania (up 11%, from 401 to 446).
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