House price appreciation is a double-edged sword for homeowners struggling to make mortgage payments, new coup analysis finds

The analysis – which examined the impact of appreciating house prices, unemployment rates, debt-to-income ratios, income inequality and length of foreclosure process on real estate transactions – found that Homeowners already struggling to make their mortgage payments are most at risk of losing their home to foreclosure as property taxes rise.

“The appreciation in house prices has become a double-edged sword,” said the co-founder and CEO of Knock. Sean Black. “Until recently, the lack of appreciation in home prices was attributed to underwater mortgages and high foreclosure rates, but in 2021 increases in foreclosures are more the result of rising home values. which pushes risky homeowners to the brink with an increase in the tax burden.In the future, property tax increases may exacerbate foreclosure rates in states with unemployment, income inequality and debt ratios. / income are widespread. “

The impact of house price appreciation and property taxes on foreclosures

In 2021, the owners of Virginia, Georgia and New York – the states with the largest increases in foreclosures – saw their property values ​​appreciate between 18% and 21%, while property taxes rose 9%, 14% and 21% on average, respectively. Since property tax assessments use recent home sales values ​​as the basis for their appraisals, many homeowners see their tax bills skyrocket due to rising market values.

During that same period, the states that historically dominated the foreclosure rankings saw their home values ​​return to their pre-Great Recession highs, having only started growing in line with the national average in 2019. From 2019 to 2021, home prices appreciated on average 22% year over year in Connecticut, 20% in New Jersey, 19% in Delaware and New Mexico and 14% in Mississippi, nearly 15 to 20 times the growth averages accumulated over the previous decade.

Over the 10-year period from 2009 to 2019, house prices in Connecticut were still 11% below their peak price in 2008, while Delaware remained down 6%. During this same period, the appreciation of the house in New Mexico (11%), New Jersey (10%) and Mississippi (8%) grew more slowly than the national average of 23%.

Top 2021 Foreclosure States (January to September 2021)

Rank

State

Real estate-

operations held

Average house price index% change YOY

Average unemployment rate

Debt-to-income ratio

Income inequality *

Average length of foreclosure process (days)

1

Virginia

3%

18%

4.6%

1.82

0.47

393

2

Georgia

2%

21%

4.1%

1.46

0.48

442

3

New Jersey

2%

20%

7.4%

1.46

0.48

841

4

Mississippi

2%

14%

6.1%

1.56

0.48

133

5

New York

2%

19%

8.0%

0.74

0.51

885


national

1%

20%

5.6%

1.50

0.46

614

* Gini coefficient

Top Lockdown States of 2019

Rank

State

Real estate-

operations held

Average house price index% change YOY *

Average unemployment rate *

Debt-to-income ratio *

Income inequality *

Average length of foreclosure process (days)

1

New Jersey

ten%

0%

6.8%

1.73

0.48

841

2

Mississippi

seven%

1%

7.4%

1.47

0.49

133

3

Delaware

seven%

0%

5.8%

1.66

0.45

321

4

Connecticut

seven%

0%

6.5%

1.56

0.50

854

5

New Mexico

6%

1%

6.5%

1.71

0.48

701


national

2%

2%

6.4%

1.51

0.48

614

* 2009-2019

To view the full report, including charts and methodology, please visit: https://blog.knock.com/2021-brings-in-new-states-topping-the-foreclosure-charts/

About hitting

Knock makes buying a home easy and safe by turning all buyers into cash buyers and giving them full control of the process from their phones. Knock’s flagship product, Home Swap ™, allows consumers to buy the home they want before selling the home they own, so they don’t have to live on repairs or visits. Knock GO ™ (Guaranteed Offer) is a cash-backed home loan solution for first-time homebuyers looking to compete in today’s vibrant housing market.

Launched in 2015 by the founding members of the Trulia.com team, Knock has collected over $ 600 million in debt and equity from leading investors including RRE Ventures, Foundry Group, Redpoint, Greycroft, Corazon Capital, Correlation Ventures, Great Oaks Venture Capital and FJ Labs. The national association of real estate agents®, through its investment arm Second Century Ventures, is a strategic investor in Knock, empowering its 1.5 million members to market Knock homeownership solutions to their clients. Knock currently operates in 69 markets nationwide and plans to have a presence in more than 100 markets by 2023.

Contact: [email protected]

SOURCE Hit

Source link

About Teresa G. Wilson

Check Also

Affinity Bancshares: Worth keeping an eye on, but not buying it now (NASDAQ: AFBI)

Marilyn Nieves/E+ via Getty Images introduction I’m always interested in learning more about small regional …