Impact of Rising Property Tax and Insurance Costs on Homeowners

The real estate market is witnessing a modest increase in foreclosure activity following a period of moratoria that paused foreclosures during the pandemic. While this could be attributed to homeowner distress caused by recent economic difficulties, it is also influenced by foreclosures that were already in motion before the pandemic.

However, the foreclosure situation is not as severe as in the past, thanks to various mitigating factors. The mortgage servicing industry has introduced COVID-era rescue packages that prevent immediate foreclosures. Furthermore, standardized loss-mitigation measures implemented since the Great Recession in 2008 have significantly reduced the chances of a foreclosure crisis.

According to CoreLogic’s Loan Performance Index, the overall foreclosure rate in the United States stands at 0.3% for the past 22 months, slightly up from 0.2% in early 2022. This is the lowest foreclosure rate recorded since 1999, indicating a positive trend. Despite an initial surge in foreclosure activity in 2022 and early 2023, most areas have seen a decline in foreclosure rates.

The increase in foreclosure activity is concentrated in specific markets. Louisiana and the District of Columbia have experienced the highest increases in foreclosure rates, rising by 26 and 28 basis points, respectively. New York currently has the highest foreclosure rate at 1%, only 8 basis points higher than a year ago.

Key factors contributing to the rise in foreclosures are inflation and rising property tax and insurance costs. Property tax bills across the US have increased by an average of 24% compared to 2019. In some states like Texas, homeowners are facing over $1,000 per year in property tax hikes. Additionally, property insurance costs have risen, and coverage may be difficult to obtain in certain areas prone to natural disasters.

To combat the issue of foreclosure, the Biden administration has launched programs such as the Homeowner Assistance Fund and the Federal Housing Administration’s Payment Supplement. These initiatives aim to provide financial assistance to homeowners at risk of losing their homes and offer mortgage servicers tools to reduce borrowers’ monthly payments without resorting to foreclosure.

Overall, while the increase in foreclosure activity is a cause for concern, it remains localized and affects specific demographics and regions. The implementation of government programs and the use of mitigating factors have helped alleviate the problem for most borrowers. With continued efforts and support, the foreclosure crisis can be effectively managed and minimized.






差し押さえの問題に対処するため、バイデン政権は、Homeowner Assistance Fundや連邦住宅公社のPayment Supplementなどのプログラムを開始しました。これらの取り組みは、住宅所有者が住宅を失うリスクに直面している人々に財政支援を提供し、差し押さえに頼らずに借り手の月々の支払額を削減するための住宅ローンサービサーのツールを提供することを目的としています。