Are Foreclosures on the Rise in NWA?

Apr 10, 2024

Written by Desire Stock, Executive Broker with Collier and Associates

Historically, we have seen a marked increase in foreclosures based on increased interest rates. Interest rates are up. Are foreclosures on the rise nationwide? What about on a local scale? Let’s dive into the data. 📊

As of 2023, the overall U.S. mortgage delinquency rate has exhibited stability, even showing a significant decrease from the previous year. A leading indicator is tracking the number of delinquent mortgages by 30 days, which is 2.8% nationwide. However, it’s crucial to note regional differences, with approximately one-third of metropolitan areas experiencing an uptick in overall delinquency rates compared to the previous year. This discrepancy highlights localized economic pressures that may hinder homeowners’ ability to fulfill mortgage obligations. 

Despite regional variations, national data indicates a reduction in the delinquency rate, containing loans 90 days or more past due, suggesting that fewer borrowers are grappling with severe financial distress. The foreclosure inventory rate, which tracks homes in foreclosure, came in at 0.26% in 2023. Let’s put this in perspective: in 2010, it peaked at 2.23%, while in 2021, it dropped to a 20-year low of 0.11%. As you can see, we are seeing low levels of foreclosures despite increased interest rates. The remarkably low delinquency rates can be partly attributed to price appreciation over the past decade, alongside cash injection into the economy during the COVID-19 pandemic and the remarkable surge in the stock market. 💰

CoreLogic’s analysis emphasizes the job market’s significant role in bolstering mortgage performance. With national unemployment rates consistently below 4% for the past two years, job stability has played a pivotal role in enabling many homeowners to stay current on their mortgage payments. 

Washington County has reported a mere 11 foreclosure filings out of 76,331 residences, while Benton County has recorded 13 foreclosure filings out of 103,949 residences this year, resulting in a foreclosure rate of just 0.013%.

NWA’s unemployment rate, at 2.9%, is below the national average, displaying the region’s economic vitality and stability. Northwest Arkansas continues to uphold a robust and flourishing real estate market. 

 

Sources:

Data

www.corelogic.com

https://www.bls.gov/eag/eag.ar_fayetteville_msa.htm