Vacant residential homes, also known as “zombie properties,“ continue to represent a small portion of the U.S. real estate market, allaying fears of a foreclosure crisis following the end of pandemic-initiated moratoriums.
Data released Thursday by Attom in its second-quarter 2024 Vacant Property and Zombie Foreclosure Report showed that about 1.29 million U.S. residential properties, or 1.3% of existing stock, are vacant. That share remained the same as in Q1 2024. Additionally, about 237,000 properties are currently in the process of foreclosure, down 2.3% on a quarterly basis and down 23.9% year over year.
Among these pending foreclosures are 6,945 properties sitting vacant as “zombie foreclosures,“ or homes abandoned by their owners. That number is 5.4% lower on a quarterly basis and 20.6% lower on a yearly basis, Attom reported.
Vacant pre-foreclosure homes at lowest level since early 2021
These vacant pre-foreclosure homes represent one in every 14,724 homes in the nation, the lowest level since early 2021. “Zombie foreclosures numbers remain so small that most neighborhoods around the country face little or no threat of the blight and decay those homes can spread,“ the report explained.
Even before the federal foreclosure moratorium ended on July 31, 2021, some pundits called for a dramatic decrease in home prices and the seizure of many properties due to the inability of borrowers to repay their mortgages. Nearly three years later, the data shows a much different trend.
“Predictions of a huge spike in foreclosures after the moratorium, with the potential for a surge in zombie properties, never came true. Indeed, the opposite has happened, as abandoned homes in foreclosure continue to get harder and harder to find around the country,” Attom CEO Rob Barber said in a statement.
“Some signs have popped up over the past year that the long U.S. housing market boom is giving back some of its gains, which could lead to declining equity and more foreclosures. We are still far from losing the benefit of having zombie properties nearly disappear from the housing market landscape.”
CoreLogic data released this week backs up that statement as foreclosures impacted 0.3% of all U.S. mortgages in March, a rate that has not changed in more than two years. The national delinquency rate, which measures the share of loans at least 30 days past due, was at 2.8% for a third straight month.
Across all states, the highest residential-property vacancy rates in Q2 2024 were found in Oklahoma (2.27%), Kansas (2.18%), Missouri (2.06%), Alabama (2.04%) and Michigan (2.02%).
The lowest vacancy rates were posted in New Hampshire (0.36%), New Jersey (0.41%), Vermont (0.44%), Idaho (0.47%) and California (0.64%).
Among the 168 metropolitan areas analyzed by Attom, the highest zombie foreclosure rate in Q2 2024 was in Peoria, Illinois, at 18.6%. St. Louis led the way among the largest metros at 7.8%.
