What's up with Florida foreclosures
Bottom Line: Yes,Florida foreclosure rates are up. No, it’s not time to worry. If you’ve been following real-estate news from around our state, it’s likely you’ve heard that foreclosures up trending up. And that’s true. First a look at what’s going on.
- Foreclosure rates are up 23% year over year
- Florida’s back to having the third highest rate of foreclosures in the country
That’s the bad news. Here’s the more helpful news. Why it’s happening. There are three prominent reasons and only one of them has longer term implications. Here are the top three reasons for the increase in Florida foreclosure rates:
#1: Defaulting on second mortgages
#2: Hurricane Michael
#3: Rising property taxes and insurance costs
If you’re using your home as a cash register...have we not learned our lessons? Yes, some Floridians have tapped home equity with the appreciation in real-estate in recent years. Yes, with the higher interest rates until recently some have gotten into trouble because of it. Let that be a warning to all others who’re considering it. The real uncontrollable catalyst here is hurricane Michael. The biggest surge in foreclosure activity is in the panhandle, in Michael affected areas. With homes destroyed and job prospects limited – we've unfortunately seen the impact of Michael come full-circle. This isn’t something that’s indicative of Florida’s housing market or anything that’s controllable. The one that is of some concern is the rising cost of insurance and rising property taxes. But here’s the rest of the story.
While foreclosure rates are up year over year total foreclosure activity is only back to levels last seen in July of last year. Activity is also within healthy levels – only a quarter of the activity we saw during the recession. And here’s the final bit of good news. Within the past two weeks mortgage rates on 30-year fixed rate mortgages dipped back below 4% for the first time in two years. If you have a mortgage above 4%, you can likely refi right now and start saving money on your mortgage if things are getting tight (or if you’re simply into saving money).