"Zombie" Foreclosures Rising But Still Small Presence Around Most Of U.S.

The number of vacant homes in foreclosure is up for the fifth consecutive quarter, according to property data provider ATTOM’s second-quarter Vacant Property and Zombie Foreclosure Report.

The report, which analyzes publicly recorded real estate data, shows that 1.3 million residential properties — 1.3% or 1 in 79 homes — in the United States are vacant. Data analyzed included foreclosure, equity and owner-occupancy status, which is matched against vacancy data that is updated monthly.

“Zombie foreclosures keep inching up as lenders pursue more delinquent homeowners in courts around the country,” ATTOM CEO Rob Barber said. “All indications are that the number of zombie properties will keep going up slowly, given that foreclosures are up."

The report also found that 311,508 U.S. residential properties are in the foreclosure process this quarter, up 4.3% from the first quarter and 20.2% from the second quarter of 2022. The number of homeowners facing foreclosure has risen since a nationwide moratorium on lenders pursuing delinquent homeowners imposed during the COVID-19 pandemic hit in early 2020 was lifted in the middle of 2021.

Of the pre-foreclosure properties, 8,752 are zombie foreclosures — pre-foreclosure properties abandoned by their owners this quarter. That’s up 7.5% from the first quarter and 15.6% from a year ago or a difference of 8,141 in the first quarter and 7,569 in the second quarter last year.

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“But abandoned properties are still nothing more than a dot on the radar screen among the majority of neighborhoods, and we are still a long way from the fallout after the Great Recession of the late 2000s when this was a very real issue in many areas around the U.S.,” Barber said. 

The biggest increase in zombie foreclosures from the first quarter to the second quarter was in Texas, where they were up 47%. Ohio, up 26%; Oklahoma, up 22%; Georgia, up 22%; and Iowa, up 21% followed.

The only quarterly decreases are in Michigan, which is down 20%; South Carolina, down 2%; Pennsylvania, down 1%; and New York, down less than 1%. But New York has the highest ratio of zombie homes to all residential properties — one of every 2,140 homes — followed by Ohio, Iowa, Illinois and Florida. 

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