Florida ranks second highest in foreclosure rates nationwide, a July report found.
ATTOM Data Solutions, a leading property data analysis group, reported foreclosures have increased 11% across the U.S. since July of last year -- and were up 13% in July compared to the previous month -- indicating that Americans are struggling to keep up with their mortgage payments.
Florida’s percentage was smaller -- at 3.4% -- but its foreclosure rate of one in every 2,420 homes is second only to Nevada, where it’s one in every 2,326. These cases are prevalent mostly in South Florida and the coastal areas of the peninsula, while mid-Florida has, so far, managed to avoid the higher increase.
Orlando has avoided that trend so far, though its pricey housing market has seen home sales plummet over the past two years, and the days a home is listed for sale stretch past six months.
Data from the Orlando Regional Realtor Association indicate homes in Orange, Seminole and surrounding counties are outliers, not contributing much to those rising numbers. The association does not track foreclosures specifically, but related distressed sales in the region, such as short sales and foreclosures, are down 51% from just two years ago.
The organization’s president, Lawrence Bellido, a Realtor with more than 35 years of experience in the region, said one of the main reasons Central Florida homeowners are safer is high home values.
Longtime homeowners and people who bought homes in the Orlando area during the “post-pandemic craze,” when home prices and mortgage rates hit very low numbers, have owned their homes through the subsequent population boom and intense housing demand. The housing shortage drove – and continues to drive – prices up to historic levels.
That appreciation is called “building equity,” which means that many Orlando-area homeowners can sell their homes for more than they bought them – a good place to be in to avoid foreclosure in the event that affordability becomes an issue.
“We're not seeing (foreclosures) in Orange County, Orlando, Seminole County. We have a very healthy market,” Bellido said. “Right now, in Central Florida, our equity has grown so much over the years, it's very difficult for someone to just lose their house.”
The ATTOM data do show high foreclosure rates in July for Deltona and Lakeland. They rank in the five worst among metros with at least 500,000 people.
Affordability challenges
Property insurance costs are also influencing the lower foreclosure numbers in the Orlando region. Although the region’s homeowners pay higher premiums than the national average -- with some of the most expensive insurance costs in the nation -- households in inland Florida cities still tend to pay less compared to those in coastal areas.
Nationwide, AEI Housing Center's July Home Price Appreciation Report found that home price growth was just 1.8%, its lowest level in more nearly 12 years.
Florida saw some of the biggest price drops in the country. Among the 60 largest metros, the four with the steepest declines are in Florida, including Brevard County’s city of Palm Bay at -4.4%.
Some experts reported they expect home prices to stop going up altogether by the end of the year.
Again, the Orlando area is the exception, with historically high home prices. The region recorded its highest average median price last month, at about $459,000.
Bellido said it is finally slowing down but the still-growing population and the popularity of the Orlando market mean this is likely to continue a while longer. He expects the market to smoothly “recalibrate,” without the extreme dips and corrections other Florida real estate agents are seeing.
However, he said, homes are sitting listed for sale for longer than six months, and although month-to-month sales are up, it’s not by much – 1.5%. He said that although mortgage interest rates are finally stabilizing, sitting around 6.5%, he believes people are waiting for them to drop even more.
But he doesn’t see this happening and said that anyone waiting for another housing market “crash,” like the one in 2008, won’t see one.
“Are the properties a little bit stagnant? Yes, they are,” Bellido said. “And that's normal with interest rates being where they're at right now, and also the conversations of the ‘rate drop’ that people are anticipating.”
A sharp drop in sales
Unlike Orlando, dramatic overcorrections across Florida and Texas cities drove some of the most – and steepest – home price drops in the nation for July, which is unusual in the summer months. And yet, even with lower prices, sales are also way down.
Last month, the country had more than a 15% rate of sales cancellations – a record for July -- with Florida again placing second, after Texas. And here Orlando was no exception, with 18.2% of its sales falling through.
In fact, home sales in Orlando are down a whopping 63% from where they were at this time just two years ago.
Bellido said that’s because there are more homes on the market, so people can take their time, using their buying power to negotiate better prices amid the current peak and biding their time for possibly lower mortgage rates.
But the current political and economic uncertainties, such as federal tariffs, rising home insurance costs and property taxes also factor into the homebuyer’s decision.
ATTOM reports that a growing number of Americans, now at 66%, struggle to keep up with mortgage payments, insurance premiums, and other housing costs.
Lillian Hernández Caraballo is a Report for America corps member.
