Foreclosure filings rose 14% in May and 26% in Q1, driven by rising property taxes and insurance costs, not bad lending. ATTOM data shows hotspots in FL, SC, MD, NV, IN.
Alpha Score of 46 reflects weak overall profile with moderate momentum, poor value, weak quality, weak sentiment.
Foreclosure filings rose 14% year over year in May, HousingWire reported. ATTOM, a property data firm, said first-quarter filings jumped 26% from a year earlier.
The increase is concentrated in a handful of states. Florida, South Carolina, Maryland, Nevada, and Indiana post the highest foreclosure rates, according to ATTOM.
The cause is not reckless lending. Bad loans to unqualified buyers do not drive the surge, the Wall Street Journal reported. Instead, rapidly rising property taxes and insurance costs are pushing homeowners into default. "They're having payment shocks from taxes and insurance…along with potential job distress," Marina Walsh, an economist at the Mortgage Bankers Association, told the Journal.
Rob Barber, ATTOM's CEO, said affordability is the root issue. "While home prices have eased slightly from last summer's record highs, affordability remains a challenge in much of the country," he said in a statement. "The greatest risk remains in counties where unemployment rates are above 5%."
Delaware had the highest foreclosure rate in April, with one filing per 1,739 housing units. Hannah Jones, senior economic research analyst at Realtor.com, said the rate overstates the problem. Delaware recently completed its first comprehensive property tax reassessment in 40 years, she said, and its small housing stock makes per-unit rates volatile.
South Carolina's high foreclosure rate stems from a different problem. Rapid in-migration drove home prices beyond what local incomes could support, Jones said. Many buyers who bought near the peak of that appreciation now face high monthly payments with little equity. New construction is adding supply, however. Joel Berner, Realtor.com senior economist, said "southern markets like South Carolina are proving that steady building pipelines can preserve affordability even as demand grows."
For investors, the data requires careful interpretation. Buying in a high-foreclosure state does not guarantee discounted deals. Underwrite each deal with current borrowing, insurance, and tax costs. If cash flow turns negative, the deal is not viable, Jones said. All-cash offers or short-term bridge loans can help secure deeply discounted properties.
"It's this layering effect that could create distress," Walsh said.
Prepared with AlphaScala research tooling and grounded in primary market data: live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.