Foreclosure numbers start to tick up in NH, but remain below pre-pandemic levels
State finishes 2022 with 0.13% foreclosure rate – not the worst in the country, but not the best either
In a ranking of states with the most residential real estate foreclosures in 2022, New Hampshire stands at 39th, with a foreclosure rate of 0.13 percent, better than the national average of 0.23 percent. According to a year-end report from real estate data curator ATTOM, the state with the worst foreclosure rate was Illinois with a rate of 0.49 percent; the best was South Dakota, with a rate of 0.02 percent,
Other New England states posted rates as follows: Vermont, 0.03 percent; Rhode Island, 0.14 percent; Massachusetts, 0.15 percent; Maine, 0.18 percent; and Connecticut, 0.26 percent.
The rate is calculated by dividing the number of properties that went into foreclosure by the total number of housing units in a particular area.
In its November report, New Hampshire Housing said that foreclosures in the state were up in 2022 as of the third quarter, but “about four times less than in 2019.”
Its data shows steadily declining numbers in the Granite State since 2015, when the number of foreclosures reached almost 1,800. That number dropped to under 1,600 in 2016, to about 1,300 in 2017, to just over 800 in 2018, to about 700 in 2019.
Then came the Covid-19 pandemic and government allowed forbearance on mortgages falling into default. In March 2020, under the CARES Act, millions of homeowners were allowed to temporarily pause or reduce their mortgage payments. That program ended in 2021 after 18 months.
Annual foreclosures in New Hampshire dropped to just above 200 in 2020, and just under 200 in 2021 as a result of forbearances.
“For homeowners who are struggling financially to pay their mortgage, property taxes, or utilities, help continues to be available through the NH Homeowner Assistance Fund program. Information and applications are available at HomeHelpNH.org,” Rob Dapice, New Hampshire Housing executive director/CEO, said in the agency’s Housing Market Snapshot from November.
He noted that current higher mortgage interest rates have resulted in more adjustable-rate mortgages, which offer a lower rate for a fixed time period.
“This can present problems for borrowers unprepared for the increased payments that come later. ARMs (adjustable rate mortgages) currently account for about 10 percent of mortgages, and their appeal is likely to last while rates remain elevated,” Dapice said.
‘Significantly lower’ activity
The ATTOM year-end numbers bear out the New Hampshire trends.
ATTOM reported that foreclosure filings — default notices, scheduled auctions and bank repossessions — occurred on 324,237 U.S. properties in 2022, up 115 percent from 2021 but down 34 percent from 2019, before the pandemic rattled the market. Foreclosure filings in 2022 were also down 89 percent from a peak of nearly 2.9 million in 2010.
Those 324,237 properties with foreclosure filings in 2022 represented 0.23 percent of all U.S. housing units, up slightly from 0.11 percent in 2021, but down from 0.36 percent in 2019 and down from a peak of 2.23 percent in 2010.
“Eighteen months after the end of the government’s foreclosure moratorium, and with less than 5 percent of the 8.4 million borrowers who entered the CARES Act forbearance program remaining, foreclosure activity remains significantly lower than it was prior to the Covid-19 pandemic,” said Rick Sharga, executive vice president of market intelligence at ATTOM. “It seems clear that government and mortgage industry efforts during the pandemic, coupled with a strong economy, have helped prevent millions of unnecessary foreclosures.”
Sharga noted that during the Great Recession – from December 2007 to June 2009 – banks took repossession of foreclosed homes and sold them at auction. That scenario is changing, according to Sharga, because homeowners have built up more equity in their property.
“Unlike foreclosure activity during the Great Recession, the majority of homes in foreclosure are not being repossessed by lenders,” Sharga said. “Our recent homeowner equity report shows that 93 percent of borrowers in foreclosure today have positive equity, which they appear to be leveraging in order to avoid a foreclosure by refinancing their mortgage or selling the property at a profit. It seems likely that this is a trend that will continue in 2023.”
The ATTOM report drills down on New Hampshire data, presenting statistics for nine of the state’s 10 counties (all but Carroll).
The county with the fewest foreclosures in 2022 was Coos, at 0.06 percent, followed by Grafton, 0.11 percent, Belknap and Hillsborough, both 0.12 percent, Rockingham, 0.13 percent, Strafford, 0.14 percent, Merrimack, 0.15 percent, Sullivan, 0.16 percent, and Cheshire 0.20 percent.
According to the NH Association of Realtors, 2022 finished with a single-family house median price of $440,000, an 11 percent increase over the year-end 2021 median price, marking the third consecutive year of double-digit percentage increases. That includes a $425,000 median price in December, a 6 percent hike over December 2021.
The last month of the year finished as other months prior – with a decided lack of homes to sell.
There were 1,542 single family residential housing units for sale at the end of December, amounting to 1.3 months’ supply. A balanced market is considered five to seven months – numbers not seen in the state since 2015.
“As a result, affordability remains at historically low levels,” the NHAR said in its December message to members, “December showed a 73 on the affordability index, which means the state’s median household income is just 73 percent of what is necessary to qualify for the median-priced home under prevailing interest rates. That’s a 28 percent drop in affordability from a year ago. By comparison, the index was over 150 as recently as 2017 and has been over 200 within the last 10 years.”