Ominous sign: New foreclosures on the rise, report says
Newly filed foreclosure lawsuits increased in Miami, Chicago and LA
New foreclosure lawsuits are starting to pop up in Miami, Chicago and Los Angeles, marking an ominous sign for a housing market that is showing indications of a slowdown.
Thirteen states posted year-over-year increases in foreclosure starts, or new foreclosure lawsuits, filed in February, according to a newly released report by Attom Data Solutions. While total existing foreclosures are down, lenders are beginning to start the foreclosure process in states like Louisiana, Illinois, Texas and Florida. New York was not on the list.
Foreclosure starts jumped 74 percent in Miami, 15 percent in Chicago and 7 percent in Los Angeles, according to Attom.
The news comes amid a number of indicators that show the post-recession housing boom is coming to an end and home prices are starting to come down. Foreclosures are also generally viewed by economists as a predictor of an economic downturn.
One promising sign is that banks have yet to start taking control of homes because borrowers cannot make payments. Banks repossessed 11,392 U.S. properties in February, down 7 percent from the previous month and down 12 percent year-over-year, Attom reported.
Some experts are projecting that 2019 will be the worst year for the housing market since the financial crisis. Homeowners are struggling to sell homes amid higher mortgage rates, and home affordability is at its lowest level in a decade.