Editor's note: This story has been updated with additional foreclosure data for July 2018; the headline has been updated to reflect this change.
Austin, it looks like we might have a foreclosure problem. This summer, the Austin area posted alarming year-over-year jumps in the number of homes starting to go through foreclosure, according to a new report from ATTOM Data Solutions.
The Austin area saw a 65 percent increase in what’s known as foreclosure starts in May 2018 compared with May 2017; that was followed by year-over-year increases of 44 percent and 29 percent in June 2018 and July 2018, respectively. The total number of foreclosure starts in Austin in July 2018 was 126.
A foreclosure start represents the first public notice of a foreclosure proceeding.
“The increase in foreclosure starts was somewhat expected in Houston and some parts of Florida — particularly Jacksonville — given the hurricane-induced flooding there last year,” says Daren Blomquist, senior vice president of ATTOM, a provider of real estate data. “But the widespread upward trend in foreclosure starts across a geographically diverse set of markets this summer indicates there is more to this trend than just natural disasters driving increased distress, although that is an interesting and important piece to all this.”
Blomquist says July’s nationwide uptick (less than 1 percent) in foreclosure starts compared with the same month in 2017 “reflects a gradual loosening of lending over the past few years that is naturally resulting in higher foreclosure numbers across a diverse set of housing markets.”
July marked the first year-over-year increase in foreclosure starts nationwide following 36 consecutive months of year-over-year decreases, ATTOM says.
In total, 96 of the 219 metro areas analyzed in the ATTOM report, or 44 percent, posted year-over-year hikes in foreclosure starts in July. Twenty-one states saw increases, including Texas (7 percent).
Houston was the only other Texas market listed in the report as having notched three months in a row of significant year-over-year increases in foreclosure starts.
The Houston area saw a 76 percent spike July compared with last July, the ATTOM report says. This followed two months of double-digit increases in the Houston area compared with last year: 62 percent in June and 153 percent in May.