Chicago was among the top major metro areas last month for completed foreclosures and foreclosure starts, joining a national trend of increased foreclosure filings in major metro areas.
In January, among major metropolitan areas, Chicago had the second largest number of completed foreclosures at 194, ranking behind Detroit’s 609. New York City, Philadelphia and San Francisco rounded out the top five.
U.S. foreclosure filings in January ticked up 5% from the same period a year ago and rose 10% from December, according to data released Tuesday by ATTOM, a real estate data firm. The monthly increase continues an upward trend of foreclosures, but in 2023 the number of people losing their homes remained below pre-pandemic levels.
Across the U.S., ATTOM “observed a slight uptick in foreclosure filings, which may be partially attributed to the typical post-holiday progression of filings through the legal system,” said CEO Rob Barber. “However, other external factors may be at play such as escalating interest rates, inflation, employment shifts and other market dynamics.”
Foreclosure starts also increased 5% in January from a year ago with lenders beginning the process on 21,770 U.S. properties. Chicago ranked fifth among major metro areas with 763 foreclosure starts last month. New York City topped the list with 1,470 starts, followed by Houston, Los Angeles and Miami.
Illinois ranked fifth among states with the greatest number of foreclosure starts last month, behind California, Texas, Florida and New York.
The increase in January foreclosures continues an overall pattern last year. In 2023, U.S. foreclosures filings rose 10% from 2022 and were up 136% from 2021, according to ATTOM’s year-end report, which includes default notices, scheduled auctions and bank repossessions.
However, foreclosure filings on 357,062 properties were down 28% from 2019, before the COVID-19 pandemic, and down 88% from a peak of nearly 2.9 million in 2010 in the aftermath of the Great Recession of 2008-2009.
“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,” Barber. said “Our data suggests that while foreclosure activity may fluctuate, it’s unlikely to approach the highs seen in the last decade.”
But the loss of a home can be devastating for individuals, families and communities.
“Foreclosure causes housing instability, reduced homeownership and financial distress,” said researchers in a 2020 paper from the National Bureau of Economic Research, which analyzed foreclosure filings in Cook County.
In 2023, several states saw an increase in foreclosure starts compared to 2019, according to ATTOM. They jumped in Indiana (up 73%) and Idaho (up 70%); and rose in Michigan (up 15%); Nevada (up 10%); and Minnesota (up 9%).
The negative impact of foreclosures can also spill over to other nearby properties and neighborhoods, by “lowering nearby property values, reducing the local property tax base, increasing blight and crime, disrupting social ties,” noted a paper from the Federal Reserve Bank of Boston.
ATTOM collects data from more than 3,000 counties nationwide, which account for more than 99% of the U.S. population.
