Florida Housing Market Warning – Newsweek

Florida reported the third-highest number of foreclosure filings in the country between January and March, according to a recent report from property and real-estate data research firm ATTOM.

Read more: What Is Mortgage Refinancing?

Foreclosures have been rising nationwide in the first quarter of 2024, with a total of 95,712 homes with a foreclosure filing. This is up 6 percent from the previous quarter and 22 percent, compared to a year earlier.

States such as Texas and Florida have been leading this trend, suggesting that the housing markets that boomed during the pandemic are now experiencing some pains, with homeowners missing mortgage payments and losing their properties.

“I think the most likely culprit is the rise in homeowners insurance that, coupled with the general inflation, has pushed people who were close to the edge over into foreclosures,” Sean Snaith, director of the University of Central Florida’s Institute for Economic Forecasting, told Newsweek.

Read more: What Is Inflation? Current Inflation Rate, Causes and How to Stay Ahead of Rising Costs

“A number of [private insurance] companies that were writing policies there left Florida; there was also a lot of litigation surrounding homeowners insurance,” Snaith said. “And all of these things clustered with a couple of hurricanes have pushed up insurance premiums in the past couple of years in the state,” he added.

“And so these higher premiums on top of the homeowners’ monthly payments—interest, taxes—might have pushed some people into foreclosure. That’s likely the reason, because the Florida economy and its labor market is still very strong,” Snaith concluded.

California had the highest number of foreclosures in the first quarter of the year, for a total of 6,867 foreclosure starts; Texas followed with 6,764; and Florida with 4,724. Houston, Texas, saw the biggest increase among the 15 metropolitan areas with the most filings in the first quarter of 2024, up 37 percent compared to a year earlier. Three Florida metros—Orlando, Tampa and Miami—followed.

Read more: How Much Equity Do You Need for a Mortgage Refinance?

Orlando saw a 28 percent increase in foreclosure filings compared to a year earlier, for a total of 1,403; Tampa experienced a 21 percent increase, for a total of 1,426 foreclosure filings; and Miami a 19 percent increase for a total of 3,011.

Florida home foreclosure
Realtor Victoria Chekanova looks in the window of a foreclosed home she is set to show to a prospective buyer on April 11, 2013 in Miami, Florida. It was the state with the third-highest number…

Joe Raedle/Getty Images

Premiums have risen by 102 percent in the past three years and are now much higher than the national average premium, according to the Insurance Information Institute, or Triple I.

The latest data analyzed from ATTOM and shared with Newsweek shows that the number of foreclosures in some Florida cities continues climbing, while it has dropped in others.

April 2024 MSA level foreclosure data shows a year-over-year increase in Orlando (13.2 percent) and Tampa (35.5 percent), while in Miami the number of foreclosures dropped over that same period by minus 14.5 percent.

At the national level, there were 31,649 foreclosure filings in the U.S. last month, down 4 percent from March and 4 percent from a year earlier.

“Upon analyzing various data points and key metrics, no definitive trend emerges to explain the foreclosure increases in Orlando and Tampa,” Rob Barber, ATTOM CEO, told Newsweek.

“Unemployment and weak home equity often contribute to higher foreclosure levels. But the latest jobless rates are low; same with home equity,” he added.

“These areas have some of the lowest seriously underwater rates in the country. All are less than 2 percent, meaning that more than 98 percent of mortgage payers have at least some equity built up in those MSAs,” Barber added.

“The overall equity rates in those areas are down a bit from a year ago, but by less than 1 percentage point, so there doesn’t seem to be anything suggesting weak equity causing foreclosure increases.”

Barber explained some of the foreclosures with higher property taxes in some areas. “Average residential taxes rose more than 5 percent from 2022 to 2023 in the Tampa and Orlando MSAs. But those increases added less than $100 to monthly expenses, so that is probably not a major factor,” he said.

“The same would be true for homeowner insurance increases, which aren’t going to add a huge amount to monthly expenses. So, amid all that, I suspect these trends may be due to nothing more than lenders with backlogs that are now being filed in court, leading to an increase in activity,” Barber added.

Uncommon Knowledge

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.

Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.