Cue the fog machine: a new report says the housing market is haunted, but the numbers say the ghosts are mostly moving out. The latest zombie foreclosure report from ATTOM, released Oct. 29, shows vacancy and zombie rates both ticked down, even as Fast Company ran it under a headline about a “frightening trend.”
I’ll say it: great Halloween hook, but that’s not what the data shows.
What the zombie foreclosure report actually found
According to ATTOM’s release, 1.2% of U.S. residential properties were vacant in the latest quarter. That is down from 1.3% in the prior quarter and in the same quarter a year earlier. It’s a small move, but it points the right way.
Zombie foreclosures are homes that sit empty while the foreclosure process drags on. ATTOM counted 8,040 of them. They make up 3% of all properties in foreclosure, down from 3.3% the quarter before.
ATTOM CEO Rob Barber put it plainly: “The fourth-quarter data showed modest declines in both vacancy and zombie foreclosure rates nationwide.” He added that vacant and abandoned homes remain “a relatively small share of the nation’s housing stock.”
So where did the scare come from?
Why the ‘frightening’ label still has a point
Two true statements can sound like opposites. The zombie rate fell, because it measures zombies as a share of all foreclosures. But the number of zombie properties still rose from the prior quarter in 29 states, ATTOM found. A shrinking share and a growing count can both be real (math is rude like that).
The hot spots are worth knowing. Baltimore and Youngstown each had zombie rates of 13% of properties in foreclosure. Fast Company also named Indianapolis and Carthage, N.Y., among the places with the highest rates of abandoned homes in foreclosure. (I could only confirm Carthage in Fast Company’s text, so treat that one as their call.)
Corporate owners add another wrinkle. National Mortgage News reports that of 30.6 million corporate-held homes, more than 840,000 sit vacant. That’s 2.7%, more than double the national rate.
What this means for your housing search
Here’s the thing: if you’re hoping a wave of empty houses will crash prices, don’t count on it. A vacancy rate near 1.2% to 1.3% has barely budged for years. In its previous quarterly report, ATTOM said 19 states had vacancy rates under 1%, a bottleneck “helping to keep prices high.” Even when sellers get spooked, home prices are still rising.
Fast Company’s own take is the sharpest one: zombie homes are a minor worry next to mortgage rates that keep buyers on the sidelines. That’s the real horror story for most families, and it has nothing to do with abandoned houses. As we’ve covered, a 7.28% mortgage is beating falling home costs, and that math hurts more than any vacant lot.
Rates also depend on what the central bank does next, so keep an eye on the Fed’s latest rate decision. The next ATTOM reports are still ahead, and they’ll show whether this modest dip holds.
For now, the scariest thing in housing this Halloween is the monthly payment, not the vacant house down the street.
