Foreclosure Surge in Florida: What You Need to Know

Florida has ranked third in the nation for the number of foreclosure filings between January and March, as reported by the property and real estate data research firm ATTOM . Nationwide, foreclosures have surged in the first quarter of 2024, with 95,712 homes facing foreclosure filings, marking a 6 percent increase from the previous quarter and a 22 percent rise from the same period last year.

States like Texas and Florida are at the forefront of this trend, indicating that the housing markets that flourished during the pandemic are now encountering difficulties, with homeowners failing to keep up with mortgage payments and consequently losing their homes.

Sean Snaith , the director of the Institute for Center for Economic Forecasting and Analysis t the University of Central Florida, attributes this rise in foreclosures primarily to increased homeowners insurance costs, combined with general inflation. He mentioned that several private insurance companies have exited Florida, leading to a lot of litigation around homeowners insurance, which, along with recent hurricanes, has driven up insurance premiums significantly over the past few years.

These higher premiums, in addition to monthly mortgage payments, interest, and taxes, have likely pushed some homeowners into foreclosure, even though Florida's economy and labor market remain robust, according to Snaith.

In the first quarter of the year, California reported the highest number of foreclosures with 6,867 starts, followed by Texas with 6,764, and Florida with 4,724. Houston, Texas, experienced the largest increase among the top 15 metropolitan areas, with foreclosure filings up 37 percent compared to the previous year. Orlando, Tampa, and Miami in Florida also saw significant increases.

Orlando reported a 28 percent increase in foreclosure filings from the previous year, totaling 1,403. Tampa saw a 21 percent rise, reaching 1,426 filings, and Miami had a 19 percent increase, with a total of 3,011 filings.

Homeowners insurance premiums have skyrocketed by 102 percent over the past three years, now significantly exceeding the national average, according to the Insurance Information Institute (Triple I). Data from ATTOM , analyzed and shared with Newsweek, shows that while foreclosure numbers in some Florida cities are still climbing, they have decreased in others.

In April 2024, year-over-year foreclosure data at the MSA level indicated a 13.2 percent increase in Orlando and a 35.5 percent increase in Tampa, while Miami saw a 14.5 percent decrease. Nationally, there were 31,649 foreclosure filings last month, a 4 percent decrease from March and the same period last year.

Rob Barber , CEO of ATTOM, noted that no clear trend explains the foreclosure increases in Orlando and Tampa. Despite low unemployment rates and strong home equity, these areas have some of the lowest seriously underwater rates in the country, with over 98 percent of mortgage payers having at least some equity.

Barber suggested that higher property taxes might explain some foreclosures, as average residential taxes rose by over 5 percent from 2022 to 2023 in Tampa and Orlando, though this added less than $100 to monthly expenses. Similarly, increases in homeowner insurance aren’t substantial enough to significantly affect monthly expenses. Barber concluded that these trends might simply reflect a backlog of lender filings now being processed in court, resulting in increased foreclosure activity.