News & Trends » Do You Live In One of the 10 States With the Lowest Foreclosure Rates in the US?

Do You Live In One of the 10 States With the Lowest Foreclosure Rates in the US?

The foreclosure crisis seems to be abating across the fruited plains, and these 10 U.S. states are leading the way toward low foreclosure rates.

Americans are gathering more economic momentum as the U.S. economy accelerates, and that’s good news for Americans struggling with mortgage debt. Overall, U.S. residential home foreclosures fell 27% in 2017, down to 676,525—the lowest figures since 2005, according to Attom Data Solutions

“Thanks to a housing boom driven primarily by a scarcity of supply, which has helped to limit home purchases to the most highly qualified—and low-risk—borrowers, the U.S. housing market has the luxury of playing a version of foreclosure limbo in which it searches for how low foreclosures can go,” notes Daren Blomquist, Attom Data Solutions senior vice president. “There are a few notable local market exceptions playing a different version of foreclosure limbo in which a backlog of legacy foreclosure activity left over from the last housing crisis is still winding its way through a labyrinthine foreclosure process, resulting in incongruous jumps in various stages of foreclosure activity in markets such as New York, New Jersey, and DC.”

On average, one in every 1,776 U.S homes is currently in foreclosure according to RealtyTrac. Topping the list are New Jersey (with one foreclosure for every 605 homes) and Delaware, followed by Illinois, Maryland, and Nevada.

On the other end of the scale, these 10 U.S. are seeing the lowest home foreclosure rates, signaling a healthy and vibrant real estate market in each locale.

10. Texas

According to RealtyTrac, Texas has a relatively-low home foreclosure rate—only one in every 2,637 homes in the Lone Star State are in foreclosure. That’s a surprising number given the damage in the Houston area from Hurricane Harvey in the summer of 2017. Yet Texas is enjoying an economic renaissance of late, and its real estate market is entering boomtown territory, as residents and new arrivals are boosting demand for new homes, and rising home values in the process in key locales like Dallas-Fort Worth, Austin, and even a post-Harvey Houston.

9. Kansas

The nation’s heartland seems to be recovering quite nicely from the Great Recession’s economic hangover. The poster child in the region could well be Kansas, where only one in 3,404 homes is in foreclosure. The state has a relatively low jobless rate of 3.4%, which helps keep foreclosures and short sales low across the state. Additionally, home appreciation values have really kicked into high gear in Kansas.

According to the Federal Housing Finance Agency and Wichita State University, home prices in Kansas have risen over 23% since 2013, which is a genuine shot in the arm for a homeowner who, prior to 2013, saw his or her home value plummet due to the Great Recession.

8. Mississippi

At one out of every 3,490 homes in foreclosure, Mississippi also makes the list of fewest foreclosures across the U.S. The Magnolia State is an outlier in that real estate prices have stayed basically flat (- 1.3% over the past year, according to Zillow) and that the average home is valued at just $113,531.

But the state’s economy is on the comeback trail, with growth expected to double in 2018 and 2019, according to the University Research Center of the Institutes of Higher Learning in Jackson, MS. Low housing costs and a strong statewide economy is a good environment for fewer foreclosures, and that’s what Mississippi is seeing right now.

7. Idaho

Another Western U.S. mainstay for housing these days is Idaho, which boasts a low foreclosure rate of one home out of 3,807 homes, RealtyTrac states. At 0.03%, Idaho’s home foreclosure rate is 50% lower than the national average. What’s especially intriguing about the Idaho real estate market, and its favorable impact on foreclosures, is the “average days on the market” figure, which stands at 28 days, as of March 2018. At that rapid rate, homeowners struggling to make mortgage payments should sell their homes fast, and at a higher price point due to the high demand for homes in Idaho. That’s good news for anyone facing home foreclosure.

6. Colorado

The Rocky Mountain State is well ahead of the median pack in low foreclosure rate status. The state only has one foreclosure for every 4,527 homes, according to RealtyTrac. That has resulted in Colorado having a home foreclosure rate that is one-third of the national average, as of March 2018.

5. Montana

The Treasure State also has a miniscule foreclosure rate—just one of every 6,277 residential properties are in foreclosure, according to RealtyTrac. Like most of the “least foreclosures” states, Montana’s home foreclosure rate is significantly lower than the national average (0.02% versus 0.06%) and the outlook on home values is especially strong.

According to Zillow.com, Montana homeowners saw their home values rise by 7.0% over the past year, and the estimate for 2018 stands at 3.8% growth. For homeowners who may have been struggling with low home values and potential mortgage payment problems, a 10.8% boost in home values over two years would go a long way in avoiding foreclosure, especially if they sell the home.

4. West Virginia

Like Vermont, West Virginia is one of the handfuls of U.S. estate east of the Mississippi River that make the “least foreclosure” list. The reasons for doing so, however, strike the same notes as state list-makes west of the Mississippi—strong housing demand, and rising home price appreciation values.

RealtyTrac has West Virginia in a great spot on foreclosures—only one in 6,384 homes are under foreclosure proceedings and only 0.02% of statewide homes are in foreclosure, against a 0.06% national average. On the downside, West Virginia does have a relatively high unemployment rate of 5.4%, which could knock the state off the “least foreclosures” list in 2018, if the jobless rate doesn’t improve.

3. Vermont

Only one in 7,176 homes in the Evergreen State are in foreclosure, as of March 2018, making Vermont singularly stand out from Northeastern neighbors like New York, New Jersey and Massachusetts who have higher home foreclosure volumes. Vermont has a low ratio of home foreclosures against the national average – 0.01% compared to 0.06% for a national average. It also boasts a low 2.8% jobless rate, and its scenic vistas and quality of lifestyle attract homebuyers with plenty of cash who are significantly less likely to see their home fall into foreclosure than most other states.

2. North Dakota

Just one of 10,824 homes in North Dakota are in foreclosure, as the state’s vibrant, energy-based economy continues to attract new job seekers—and new homebuyers—thus driving residential real estate prices upward. A strong local housing market is a huge factor in tamping down foreclosure rates, as strong demand for housing boosts home values, and allows even struggling homeowners to sell at a higher price, and improve their odds significantly of avoiding foreclosure.

1.South Dakota

One in every 11,082 homes in South Dakota are in foreclosure as of March 2018, states RealtyTrac. Only 0.01% of South Dakota residential properties are in foreclosure, compared to the national average of 0.06%. Housing prices are on the rise in the key Sioux Falls region, rising 5.2% from April 2017 to March 2018, while the state’s unemployment rate is a low 3.4%. A below-average jobless rate is key in reducing statewide foreclosure rates, as the more people who are gainfully employed are less likely to have their home fall into foreclosure.