When the subprime mortgage crisis roiled the U.S. housing market from 2007 to 2010, many states saw their number of home foreclosures increase. Nationally, the foreclosure rate peaked at about 3.6% by the beginning of 2011. The overall picture has since improved, with the national rate declining to around .05% at the time of this writing.
The recovery hasn’t been even in all states, with several lagging behind the national average. The overall housing market has remained sluggish in these states, as existing homeowners struggle to hold on to their homes with valuations sometimes still below what they owe. To get an idea of where things stand, here are the 5 states with the highest foreclosure rates:
5 – Illinois
Currently, in Illinois, about 1 in every 1348 homes is in the process of foreclosure. This translates to a rate of about .07%. The state has made some progress, but their rate has continued to fluctuate. At the beginning of this year, there were approximately 7,800 homes in foreclosure, while just under 4000 were in September. In between, the figure has risen and fallen several times, defying a steady downward pressure.
4 – Connecticut
While being 29th in population by state, Connecticut continues to have their foreclosure rate higher than the national average. As of September, they registered a rate of .08%. There were about 1,200 homes in foreclosure, which represents a reduction of about 100 per month since the beginning of the year.
3 – Maryland
In Maryland, the foreclosure rate currently sits at .09%. The recovery there has also been very limited, with the number of homes in foreclosure falling from about 3,000 per month in January to just over 2,000 in September. The decreases in the rate have also slowed in recent months with the number of new filings down less than 1% in September compared to August.
2 – New Jersey
New Jersey is traditionally recognized as an attractive home to many who work in the New York City area. The high costs in the region have contributed to a higher than average foreclosure rate. Currently, the state boasts a .13% rate, which is more than double the national average. Being one of the more populous U.S. states, this translates into about 4,200 homes in foreclosure in September, down from more than 6,000 in January.
1 – Delaware
The second-smallest state in the nation currently has the country’s highest foreclosure rate. Edging out New Jersey, their foreclosure rate in September was .14%. The trend line for the recovery has been flat of late, with the number of homes in foreclosure hovering around 600 for the whole year. The statistics point to Delaware remaining at the top of this unfortunate list for the foreseeable future unless there’s a significant structural change in the state’s housing market.
Overall, most places in the U.S have stopped seeing foreclosures increase in this year to date. The fact remains, however, that there are still pockets that are bucking the national trend and remaining at relatively high foreclosure levels. Based on the data, some of the mentioned states are looking like they’ll continue to trail the national numbers, and may even see some additional increases while their markets continue to stabilize.