Foreclosures Surge In America’s Poor Cities

Story by Douglas A. McIntyre

Foreclosures are supposed to be a thing of the past. Tens of thousands of homes fell into foreclosure during the 2008/2009 housing crisis. It took years for home prices to bounce back. Prices recovered aggressively enough that they rose to records two years ago. Then came 6% mortgage rates, and some homeowners were in trouble again. The recent foreclosure spike is particularly acute in several cities, almost all of which are poor.

Real estate research firm recently released its July 2023 U.S. Foreclosure Market Report. A total of 31,877 homes had foreclosed filings (default notices, scheduled auctions or bank repossessions). That is one of every 4,830 housing units in the U.S.

ATTOM also looks at cities. This yardstick includes the numbers for metro areas with populations of over 200,000. In July, the city hit the hardest by foreclosures was Fayetteville, NC, where one in every 1,367 housing units had a foreclosure filing. It was followed by Atlantic City, NJ, with one in every 1,708 housing units; then Columbia, SC, with one in every 1,747 housing units; Trenton, NJ, with one in every 1,870 housing units; and Cleveland, OH, with one in every 1,957 housing units. (These are 30 American cities with the most foreclosures.)

Fayetteville, a city with a population of 208,873 people, comprises 41% white and 42% black residents. The median annual household income stands at $48,923, nearly $20,000 lower than the average across the nation. The poverty rate exceeds the national average of 11.6%, reaching 19.1%.