Mortgage foreclosures have plunged
Plentiful jobs keeping filings low in Wisconsin
Mortgage foreclosure filings in Wisconsin have plunged to less than a quarter of what they were during the Great Recession and, in another economic downturn, aren’t likely to become so pervasive, says an economist who tracks foreclosures in the state.
“I almost think it would be hard to get back there because we’re at such a low level now,” said Russell Kashian, a University of Wisconsin-Whitewater economics professor who oversees the college’s Fiscal and Economic Research Center.
Data gathered by the center shows that through the first half of 2019, foreclosure filings in the state totaled 3,565 — the lowest in at least 19 years for that span.
This year’s foreclosure tally amounts to 16% fewer than the 4,248 filed during the same period in 2018, and less than a fourth of the 15,427 recorded in the January-through-June stretch of recession-riddled 2009.
Kashian said he thinks several factors have driven foreclosure filings down so significantly. One, of course, is the economy, which has produced a plethora of jobs. Wisconsin’s unemployment rate was 2.8% in May.
“People have the cash flow to pay their mortgages,” he said.
Another factor is that mortgage lending standards generally have become more rigorous since the Great Recession. That means those who bought homes in the last decade probably were well-prepared financially to make their monthly payments.
In addition, Kashian said, there may be fewer former homeowners who can afford to buy a house. Some who lost their homes — and perhaps suffered other financial strains as well — during the downturn have remained renters since then, he said.
“The number of people exposed (to foreclosure) has actually been diminished,” he said.
Foreclosures still occur, and are likely to rise if the economy sours. In fact, the number increased slightly in the first half of 2018. But for the full year 2018, state courts recorded 7,412 new foreclosure cases in Wisconsin last year, almost 3% fewer than in 2017.
The UW-Whitewater research shows that 10 years ago, there were 36 to 55 foreclosure filings per 10,000 people in Milwaukee County. In 2019, that foreclosure rate is down to 11 to 20 per 10,000 people. Foreclosures have subsided nationally as well. A report Tuesday by the property analytics and research firm CoreLogic said only 3.6% of mortgages in the U.S. were in some stage of delinquency — 30 days or more past due, including those in foreclosure — at the end of April. That was the lowest rate for any month in more than 20 years.
Kashian said foreclosure filings in 2019 may be setting the base from which to measure future increases. But, at least for now, he said, it’s difficult to see how they could rise again to levels experienced during the Great Recession.
“It is amazing how few houses are in foreclosure,” he said.