Foreclosure Rates for All 50 States

Foreclosure Rates for All 50 States in May 2022

Amid rising mortgage rates and falling home sales, foreclosures are on the upswing. The number of U.S. properties with foreclosure filings in May was 30,881, according to ATTOM Data Solutions. This is up over 185% from a year ago and makes May the 13th consecutive month showing year-over-year U.S. foreclosure activity increases. And with the National Association of Realtors® reporting that the median home price has reached a record $407,600, home ownership is becoming more difficult for both new buyers as well as existing owners.

It is also worth noting that the rate of foreclosure filings was relatively flat from April to May, up by roughly 1%. The experts at ATTOM say this aligns with the slow, steady climb they expected. Foreclosure activity has begun returning to normal levels as government and industry programs that prevented unnecessary defaults due to the pandemic are ending. However, historically high inflation and its impact on prices for necessities is likely to trigger even more foreclosure activity.

According to ATTOM, year-over-year foreclosure increases will likely continue for the rest of 2022; however, they still expect foreclosures to stay below historic levels at least through the end of the year. Read on for the foreclosure rates in May 2022 – plus the five counties with the highest rates within those states.

50 State Foreclosure Rates

As just noted, foreclosures are up slightly from last month, but significantly compared to last year. Read on for May foreclosure rates for all 50 states — plus the District of Columbia — beginning with the state that had the lowest rate of foreclosure filings per housing unit.

District of Columbia

Ranking in population between Vermont and Alaska, the country’s 49th and 48th least populated states, Washington, D.C. had 29 foreclosures in May. With a total of 350,364 housing units, Washington, D.C.’s foreclosure rate was one in every 12,082 households, putting it in between the states of Idaho (#39) and Tennessee (#38).

50. Montana

The 44th most populated state nabbed the 50th spot. With four foreclosures out of 514,803 housing units, its foreclosure rate was one in every 128,701 homes. Only two counties saw foreclosures in May. The counties with the most foreclosures per housing unit were (from highest to lowest): Cascade and Yellowstone.

49. South Dakota

South Dakota slipped out of the 50th spot. Having 389,921 total housing units, the fifth least populated state had a foreclosure rate of one in every 48,740 households and saw eight foreclosures in May. Only three counties saw foreclosures. The counties with the most foreclosures per housing unit were (from highest to lowest): Codington, Minnehaha, and Lincoln.

48. Vermont

In 49th place for population, Vermont claimed the 48th spot for its foreclosure rate. Of Vermont’s 334,318 housing units, seven homes went into foreclosure at a rate of one in every 47,760 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Essex, Franklin, Orleans, Windham, and Washington.

47. North Dakota

North Dakota’s foreclosure rate was one in every 19,507 homes. That puts the fourth least populated state – with a total of 370,642 housing units, of which 19 were in foreclosure — in 47th place once again. The counties with the most foreclosures per housing unit were (from highest to lowest): Ward, Morton, Williams, Cass, and Burleigh.

46. Kansas

Kansas took the 46th spot. With 1,275,689 homes and a total of 70 housing units going into foreclosure, the 35th most-populated state’s foreclosure rate was one in every 18,224 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Meade, Scott, Butler, Kingman, and Montgomery.

45. Kentucky

With a total 1,994,323 housing units, Kentucky saw 112 homes go into foreclosure. That put the foreclosure rate for the 26th most populated state at one in every 17,806 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Carroll, Garrard, Henderson, Greenup, and Campbell.

44. Alaska

Alaska saw 20 foreclosures, making the foreclosure rate one in every 15,876 homes. That caused the third least populated state, with a total of 317,524 housing units, to take the 44th spot. Only two counties saw foreclosures in May (from highest to lowest): Anchorage and Matanuska-Susitna.

43. Washington

Ranked 13th for most populated state, Washington came in 43rd place for highest foreclosure rate. It has 3,202,241 housing units, of which 202 went into foreclosure, making the state’s foreclosure rate one in every 15,853 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Island, Clallam, Pacific, Lewis, and Grant.

42. West Virginia

The 39th most populated state, West Virginia, ranked 42nd. It has 855,635 homes, of which 56 went into foreclosure. That means the foreclosure rate was one in every 15,279 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Wetzel, Raleigh, Cabell, Kanawha, and Barbour.

41. Arkansas

Ranked 33rd for most populated state, Arkansas once again took the 41st spot for highest foreclosure rate. It has 1,365,265 housing units, of which 90 went into foreclosure, making the state’s latest foreclosure rate one in every 15,170 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Woodruff, Crittenden, Mississippi, Saint Francis, and Chicot.

Recommended: Tips on Buying a Foreclosed Home

40. Oregon

The 27th most populated state ranked 40th for highest foreclosure rate. Of Oregon’s 1,813,747 homes, 137 went into foreclosure, making for a foreclosure rate of one in every 13,239 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Wallowa, Umatilla, Columbia, Clackamas, and Multnomah.

39. Idaho

The 38th most populated state, Idaho had 60 homes go into foreclosure. With 751,859 total housing units, the state’s foreclosure rate was one in every 12,531 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Boundary, Power, Jefferson, Lemhi, and Payette.

38. Tennessee

In Tennessee, the 16th most populated state, there were 271 foreclosures out of 3,031,605 housing units. That put the foreclosure rate at one in every 11,187 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Houston, Decatur, Henderson, Hardeman, and Moore.

37. Wisconsin

With 262 foreclosures out of 2,727,726 total housing units, Wisconsin, the 20th most populated state, had a foreclosure rate of one in every 10,411 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Juneau, Marquette, Dodge, Marathon, and Sauk.

36. Massachusetts

The 15th most populated state ranked 36th for highest foreclosure rate. Of Massachusetts’ 2,998,537 housing units, 304 went into foreclosure, making for a foreclosure rate of one in every 9,864 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Hampden, Franklin, Plymouth, Worcester, and Berkshire.

35. Mississippi

In Mississippi, the 34th most populated state, there were 139 foreclosures out of 1,319,945 housing units. That put the foreclosure rate at one in every 9,496 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Wayne, Forrest, Warren, Leake, and Tunica.

34. New Hampshire

The 41st most populated state, New Hampshire, ranked 34th for highest foreclosure rate. Of 638,795 homes, 77 went into foreclosure, making for a foreclosure rate of one in every 8,296 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Sullivan, Cheshire, Rockingham, Grafton, Coos, and Merrimack.

33. Virginia

The 12th most populated state ranked 33rd for highest foreclosure rate, with 453 homes going into foreclosure. Having 3,618,247 total housing units, the state saw a foreclosure rate of one in every 7,987 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Colonial Heights City, Covington City, Martinsville City, Sussex, and Portsmouth City.

32. Hawaii

The 40th most populated state, Hawaii came in 32nd for highest foreclosure rate. Of 561,066 homes, 72 went into foreclosure, making for a foreclosure rate of one in every 7,793 households. Only three counties in the state had foreclosures. They were (from highest to lowest): Hawaii, Maui, and Honolulu.

31. Rhode Island

The eighth least populated state took the 31st spot for highest foreclosure rate. A total of 63 homes went into foreclosure out of 483,474 total housing units, making the foreclosure rate for the Ocean State one in every 7,674 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Providence, Kent, Bristol, Washington, and Newport.

Recommended: What Is a Short Sale?

30. Colorado

The 21st most populated state ranked 30th for highest foreclosure rate. Of Colorado’s 2,491,404 housing units, 381 went into foreclosure, making for a foreclosure rate of one in every 6,539 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Pueblo, Lincoln, Logan, Adams, and Weld.

29. Arizona

In Arizona, the 14th most populated state, there were 483 foreclosures out of 3,082,000 housing units. That put the foreclosure rate at one in every 6,381 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Cochise, Yuma, Pinal, Greenlee, and Graham.

28. Wyoming

Ranked the least populated state in the country, Wyoming claimed the 28th spot for highest foreclosure rate. With 271,887 housing units, of which 43 went into foreclosure, the state’s foreclosure rate was one in every 6,323 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Campbell, Weston, Sweetwater, Carbon, and Uinta.

27. Pennsylvania

Pennsylvania has the 27th highest foreclosure rate. The fifth most populated state had a total of 953 housing units out of 5,742,828 homes go into foreclosure, making the state’s foreclosure rate one in every 6,026 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Cameron, Fayette, Delaware, Philadelphia, and Fulton.

26. Nebraska

Ranked 37th for population, Nebraska claimed the 26th spot with a foreclosure rate of one in every 5,946 homes. With a total 844,278 housing units, the state had 142 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Red Willow, Deuel, Colfax, Frontier, and Clay.

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25. New Mexico

The 36th most populated state took the 25th spot for highest foreclosure rate. Of its 940,859 homes, 162 went into foreclosure, making for a foreclosure rate of one in every 5,808 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Chaves, Valencia, Eddy, Otero, and Socorro.

24. Louisiana

Ranked 25th for population, Louisiana took the 24th spot, with 357 homes out of a total of 2,073,200 housing units going into foreclosure. That means Louisiana had a foreclosure rate of one in every 5,807 households. The counties with the most foreclosures per housing unit were (from highest to lowest): West Baton Rouge, Livingston, Iberville, Plaquemines, and Ascension.

23. New York

With 1,564 out of a total 8,488,066 housing units going into foreclosure, the fourth most populated state took the 23rd spot. New York’s foreclosure rate was one in every 5,427 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Suffolk, Nassau, Herkimer, Orleans, and Putnam.

22. Texas

The Lone Star State saw 2,152 foreclosures. With a foreclosure rate of one in every 5,385 households, this put the second most populous state with 11,589,324 housing units into the 22nd spot. The counties with the most foreclosures per housing unit were (from highest to lowest): Ector, Liberty, Scurry, San Patricio, and Wood.

21. Alabama

Ranked 24th for most populated, Alabama came in 21st for highest foreclosure rate – the same ranking it held in April. Of its 2,288,330 homes, 425 went into foreclosure, making for a foreclosure rate of one in every 5,384 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Lowndes, Hale, Wilcox, Jefferson, and Morgan.

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20. Minnesota

Ranked 22nd for most populated state, Minnesota took the 20th spot for highest foreclosure rate. It has 2,485,558 housing units, of which 467 went into foreclosure, making the state’s foreclosure rate one in every 5,322 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Wadena, Isanti, Faribault, Morrison, and Mower.

19. Missouri

The 19th most populated state, Missouri came in 19th for highest rate of foreclosures. Of its 2,786,621 homes, 524 went into foreclosure, making for a foreclosure rate of one in every 5,318 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Atchison, Stoddard, Scott, Clinton, and Buchanan.

18. Utah

Utah placed 18th for highest foreclosure rate. Of the Beehive State’s 1,151,414 housing units, 221 homes went into foreclosure, making the 30th most-populated state’s foreclosure rate one in every 5,210 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Juab, Tooele, Carbon, Wasatch, and Uintah.

17. California

The country’s most populated state ranked 17th for highest foreclosure rate. Of its 14,392,140 housing units, 3,126 went into foreclosure, making California’s foreclosure rate one in every 4,604 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Lake, Trinity, Plumas, Kern, and San Bernardino.

16. Oklahoma

Oklahoma claimed the ninth spot. With housing units totaling 1,746,807, the 28th most populated state saw 392 homes go into foreclosure at a rate of one in every 4,456 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Greer, Jackson, Canadian, Beckham, and Kingfisher.

15. Maine

Ranked as the ninth least populated state, Maine placed 15th for highest foreclosure rate. With a total of 739,072 housing units, the Pine Tree State saw 168 foreclosures for a foreclosure rate of one in every 4,399 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Androscoggin, Washington, Oxford, Waldo, and Penobscot.

14. Nevada

Ranking 32nd in population, Nevada took the 14th spot for foreclosure rate. With one in every 4,313 homes going into foreclosure, and a total of 1,281,018 housing units, the state had 297 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Lincoln, Humboldt, Mineral, Clark, and Nye.

13. Iowa

Iowa had the 13th highest foreclosure rate. With 341 housing units out of 1,412,789 homes going into foreclosure, the 31st most populated state’s foreclosure rate was one in every 4,143 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Decatur, Adair, Pottawattamie, Union, and Jones.

12. Georgia

The eighth most populated state, Georgia ranked 12th for highest foreclosure rate. Of its 4,410,956 homes, 1,066 were foreclosed on. That put the state’s foreclosure rate at one in every 4,138 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Butts, Bibb, Seminole, Crawford, and Bleckley.

11. Michigan

Ranking 10th in population, Michigan took the 11th spot with a foreclosure rate of one in every 3,936 homes. With a total of 4,570,173 housing units, the state had 1,161 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Shiawassee, Genesee, Saint Joseph, Calhoun, and Osceola.

Recommended: Your 2022 Guide to All Things Home

10. Indiana

The 17th largest state by population, Indiana took the 10th spot with a foreclosure rate of one in every 3,877 homes. Of its 2,923,175 homes, 754 homes were foreclosed on in May. The counties with the most foreclosures per housing unit were (from highest to lowest): Howard, Grant, Clinton, Madison, and Lake.

9. Connecticut

With 399 of its 1,530,197 homes going into foreclosure, Connecticut had the ninth highest foreclosure rate at one in every 3,835 households. In the 29th most populated state, the counties that had the most foreclosures per housing unit were (from highest to lowest): Windham, Litchfield, New London, and New Haven, and Hartford.

8. North Carolina

The ninth most populated state took eighth place for highest foreclosure rate. Out of 4,708,710 homes, 1,258 went into foreclosure. That put the Tar Heel State’s foreclosure rate at one in every 3,743 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Gates, Onslow, Scotland, Jones, and Vance.

7. Maryland

Ranked 18th for most populated state, Maryland took seventh place for highest foreclosure rate. With a total of 2,530,844 housing units, of which 815 housing units went into foreclosure, the state’s foreclosure rate was one in every 3,105 households. The counties with the most foreclosures per housing unit were (from highest to lowest): Charles, Kent, Prince George’s County, Garrett, Caroline, and Washington.

6. South Carolina

With one in every 3,045 homes going into foreclosure, South Carolina took the sixth spot. Ranked 23rd for population, South Carolina has 2,344,963 housing units and saw 770 foreclosure filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Darlington, Lexington, Mccormick, Dorchester, and Laurens.

5. Florida

The third most populated state in the country has a total of 9,865,350 housing units, of which 3,538 went into foreclosure. The state’s fifth highest foreclosure rate is one in every 2,788 homes. The counties with the most foreclosures per housing unit were (from highest to lowest): Baker, Osceola, Okeechobee, Duval, and Clay.

4. Ohio

Ohio claimed the fourth spot, with a foreclosure rate of one in every 2,667 homes. With a total of 5,242,524 housing units, the seventh most populated state had a total of 1,966 filings. The counties with the most foreclosures per housing unit were (from highest to lowest): Cuyahoga, Huron, Darke, Preble, and Lake.

3. Delaware

The sixth least populated state in the country, Delaware entered the top three, taking the third spot for highest foreclosure rate. With one in every 2,426 homes going into foreclosure and a total 448,735 housing units, Delaware saw a total of 185 foreclosure filings. With only three counties in the state, the most foreclosures per housing unit were in (from highest to lowest): Kent, New Castle, and Sussex.

2. New Jersey

With a foreclosure rate of one in every 2,346 homes, New Jersey held on to second place. The 11th most populated state has 3,761,229 housing units, of which 1,603 went into foreclosure. The counties with the most foreclosures per housing unit were (from highest to lowest): Cumberland, Salem, Sussex, Warren, and Camden.

1. Illinois

Illinois took the number one spot again in May. Of its 5,426,429 homes, 2,000 went into foreclosure, making the sixth most populated state’s foreclosure rate one in every 2,713. The counties with the most foreclosures per housing unit were (from highest to lowest): Kendall, Whiteside, Ford, Kankakee, and Rock Island.

The Takeaway

Of all 50 states, Florida had the most foreclosure filings (3,538); Montana had the least (4). As for the states with the highest foreclosure rates, Illinois, New Jersey, and Delaware took the top three spots, respectively.

Three regions – The Great Lakes, the Mideast and Southeast – tied for having the largest presence among the 10 states that ranked the highest for foreclosure rates. The states in the Great Lakes region were (from highest to lowest): Illinois, Ohio, and Indiana. The states in the Mideast region were (from highest to lowest): New Jersey, Delaware, and Maryland. The states in the Southeast region were (from highest to lowest): Florida, South Carolina, and North Carolina.

The Plains region and the Southeast region tied for the largest presence among the 10 states that ranked the lowest for foreclosure rates. The states in the Plains region were (from highest to lowest): Kansas, North Dakota, and South Dakota. The states in the Southeast region were (from highest to lowest): Arkansas, West Virginia, and Kentucky.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

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10 Tips for Writing a Real Estate Offer Letter

In a competitive market, buyers have been known to waive contingencies, increase earnest money, insert escalation clauses, and pen love letters. Yes, that’s right: personal letters to sellers in an attempt to stand out from the crowd.

The National Association of Realtors® (NAR) isn’t feeling the love for “love letters” because they often contain personal information about the buyer, like their race and culture, that could make sellers and their agents vulnerable to accusations of discrimination.

Oregon was poised to ban homebuyer offer letters until a federal judge permanently blocked the law in March 2022. That month a Rhode Island representative introduced a bill to outlaw the practice in her state, calling it “kind of a very quiet way of redlining, potentially,” before the bill was held for further study.

So the practice goes on, legally, as of now, despite the letters’ tepid sway. A Zillow survey of partner agents showed that love letters were the least successful strategy for winning the deal (all-cash offers made sellers’ hearts beat fastest).

If you’re inclined to write a homebuyer love letter, here are tips.

1. Make a Strong Opening

Remember handwriting? Do your best and write your letter on a nice piece of stationery. You’re trying to humanize yourself in the eyes of the seller, and a handwritten note can go a long way toward doing so.

Address the seller by name if possible, searching for it online, or asking your real estate agent. As you write the letter, convey a friendly tone and a sincere message.

2. Tell the Owner About Yourself

You might choose to tell the sellers something memorable about your family, that you plan to raise kids in the house, or that the yard is perfect for your dogs.

You could also talk about where you’re moving from and why. Maybe you’ve taken a new job, you’re looking for a sense of community, and you fell in love with this neighborhood.

If you mention your family, just realize that familial status is protected against discrimination under federal housing rules. (In this case, sellers or their agents are not to act with bias against, or in favor of, families with children. The point of the Fair Housing Act is to create a level playing field for all people renting or buying a home, getting a mortgage, or seeking housing assistance.)

3. Think Twice About Sending Photos

Photos are part of what makes NAR uneasy, because race, gender, gender identity, sexual orientation, disability, religion, and familial status are protected against housing discrimination under the Fair Housing Act.

Yet many real estate agents allow buyer clients to include photos with their offer letters.

The NAR director of legal affairs advises Realtors to “avoid helping buyer clients to draft or deliver love letters. … Counsel them to focus on the characteristics of the home or other objective information.”

Still, buyer love letters are actually encouraged by some agencies — along with photos and even videos.

4. Share What You Like Best About the Home

Why you want to buy the home is the central theme of your letter. So you may want to tell the sellers somewhere near the top what you like best about their house.

Mention details. For example, maybe you like the large front porch and can picture gathering there with friends and family on summer nights. Or maybe you’ve become enamored of the kitchen, where you’ll perfect your bread-making skills. If, by chance, the property has an ADU, you could describe your plans for it.

You could throw in a bit of flattery, letting the sellers know how much you appreciate how they’ve maintained the home.

5. Find a Connection

One way to develop a relationship with someone is to find common traits or interests. If you notice that you and the sellers share an interest, it can’t hurt to let them know.

Perhaps you’re a gardener, and it’s clear they’ve got the plant bug. Maybe you have a passion for pottery, and the seller has a small ceramics studio. Or maybe you noticed a jersey from your favorite basketball team.

As you hunt for a connection, be careful not to cross any personal boundaries that might make the seller uncomfortable.

6. Explain Your Offer

Once you’ve given a sense of yourself and why you want to live in this house, you can get down to explaining your offer. Be honest and respectful as you give context.

If you’re living in a time of bidding wars and your offer isn’t the highest, there’s no need to dance around it. You could explain that the house is your dream home, but it’s at the top of your price range and that you respectfully ask the seller to consider your offer.

If the sellers are selling and buying at the same time, you could mention your willingness to do a rent-back agreement that would allow them to lease their former house from you for a set period of time.

7. Let Them Know You Are Serious

Selling a home is a lot of work. The last thing sellers want on their hands is a buyer who slows down the process and might not even make it through closing.

Make sure your letter reiterates that you are pre-approved for a mortgage and are flexible about closing dates.

8. Mind the Length

If there’s a lot of interest in a property, sellers might receive many love letters. They may not have the time, or interest, to read long-winded missives, so keep yours short and sweet, perhaps one page.

9. Thank the Owners

The close of your letter should be as strong as the opening. This is your last chance to make an impression, weave in some personal notes, and make any final flattering remarks.

Thank the sellers for considering your offer, and let them know you are looking forward to hearing from them soon.

10. Avoid Negativity

Some things are better left unsaid, like changes you’d like to make. The sellers may have spent a long while making their home perfect in their eyes. So even if you want to open up the floor plan and pull up the carpet, it’s a good idea to keep those thoughts to yourself for now.

You don’t want to make market prices, or this particular one, sound unfair. And it’s smart to avoid pressuring the sellers in any way, as with talk about time constraints.

Finally, don’t contradict anything that might go into a purchase agreement.

The Takeaway

In a seller’s market, a so-called love letter gives buyers a chance to distinguish themselves. Though not all real estate agents are keen on clients sending personal letters, the practice continues.

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SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

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Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Historical 30-Year Fixed-Rate Mortgage Trends

Historical 30-Year Fixed-Rate Mortgage Trends

Historically speaking, mortgage rates have remained relatively low since the Great Recession, with some fluctuation at times due to market conditions. As a result, a generation of homebuyers has become accustomed to a low 30-year fixed-rate mortgage.

But with mortgage rates on the rise, it can put a sour taste in the mouths of people trying to join the ranks of homeowners in the country. They may be thinking that they missed an opportunity to buy a home. However, it’s important to look at the history of mortgages and mortgage rates to put the current conditions into context.

The History of Mortgage Rates

The modern history of mortgage lending in the U.S. began in the 1930s with the creation of the Federal Housing Administration. From the 1930s through the 1960s, a combination of government policy and demographic changes made owning a home a normal part of American life. During this time, the 30-year fixed-rate mortgage became the standard for home buying.

When discussing the fluctuation of mortgage rate trends, analysts usually refer to the average 30-year fixed-rate mortgage. Here’s a look at the trend of these mortgage rates since the 1970s.

The 1970s

Throughout the 1970s, mortgage rates rose steadily, moving from the 7% range into the 13% range. This uptick in rates was due, in part, to the Arab oil embargo, which significantly reduced the oil supply and sent the U.S. into a recession with high inflation — known as stagflation.

As a result, Federal Reserve Chairman Paul Volcker made a bold change in monetary policy by the end of the decade, raising the federal funds rate to combat inflation. Though the Federal Reserve doesn’t directly set mortgage rates, its monetary policy decisions can still impact many financial products, including mortgages.

The 1980s

The average 30-year fixed-rate mortgage hit an all-time high in October 1981 when the rates hit 18.63%. The Federal Reserve’s tight monetary policy affected this high borrowing cost and put the economy into a recession. However, inflation was under control by the end of the 1980s, and the economy recovered; mortgage rates moved down to around 10%.

The 1990s and 2000s

Mortgage rates continued a downward trend throughout the 1990s, ending the decade at around 8%. At the same time, the homeownership rate in the U.S. increased, rising from 63.9% in 1994 to 67.1% in early 2000.

Several factors led to a housing crash in the latter part of the 2000s, including a rise in subprime mortgages and risky mortgage-backed securities.

The housing crash led to the Great Recession. To boost the economy, the Federal Reserve cut interest rates to make borrowing money cheaper. Mortgage rates dropped from just below 7% in 2007 to below 5% in 2009.

Recommended: ​​US Recession History: Reviewing Past Market Contractions

The 2010s

Mortgage rates steadily decreased throughout most of the 2010s, staying below 5% for the most part. The Federal Reserve enacted a zero-interest-rate policy and a quantitative easing program to prop up the economy during this time following the Great Recession. This helped keep mortgage rates historically low.

The 2020s

The Federal Reserve reduced the federal funds rate to near-zero levels in March 2020, causing a drop in rates of various financial products. The effects of the fallout from the Covid-19 pandemic pushed mortgage rates below previous historic lows. The average 30-year fixed-rate mortgage hit 2.77% in August 2021.

However, with inflation reaching levels not experienced since the early 1980s, the Federal Reserve reversed course. The central bank started to tighten monetary policy in late 2021 and early 2022, which led to a rapid increase in mortgage rates. In May 2022, the average mortgage rate was above 5%. While this is below historical trends, it’s the highest rate since 2018.

Recommended: How Rising Inflation Affects Mortgage Interest Rates

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Why Do Mortgage Rates Change?

As we can see from looking at interest rate fluctuations, major economic events can significantly impact mortgage rates both in the short and long term. As noted above, this has to do primarily with the Federal Reserve.

Federal Reserve actions influence nearly all interest rates, including mortgages through the prime rate, long-term treasury yields, and mortgage-backed securities. The Federal Reserve sets the federal funds benchmark rate, the overnight rate at which banks lend money to each other.

Recommended: Federal Reserve Interest Rates, Explained

This rate impacts the prime rate, which is the rate banks use to lend money to borrowers with good credit. Most adjustable short-term rate loans and mortgages use the prime rate to set the base interest rates they can offer to borrowers. So, after the Federal Reserve raises or lowers rates, adjustable short-term mortgage loan rates are likely to follow suit.

Longer-term mortgage rates have also risen and fallen alongside economic and political events with movement in long-term treasury bond yields. In the short term, a Federal Reserve interest rate change can affect mortgage markets as money moves between stocks and bonds, affecting mortgage rates. Longer-term mortgage rates are influenced by Fed rate changes but don’t have as direct an effect as short-term rates.

Can Changing Rates Affect Your Existing Mortgage?

If you have a mortgage with a variable interest rate, known as an adjustable-rate mortgage, changing rates can affect your loan payments. With this type of home loan, you may have started with an interest rate lower than many fixed-rate mortgages. That introductory rate is often locked in for an initial period of several months or years.

After that, your interest rate is subject to change — how high and how often depends on the terms of your loan and interest rate fluctuations. These changes are generally tied to the movement of interest rates, but more specifically, which index your adjustable-rate mortgage is linked to, which can be affected by the Fed’s actions.

However, most adjustable-rate mortgages have annual and lifetime rate caps limiting how high your interest rate and payments can change.

If you took out a fixed-rate mortgage, your initial interest rate is locked in for the entire time you have the home loan, even if it takes you 30 years to pay it off.

Recommended: What Is a Good Mortgage Rate?

The Takeaway

If you are in the market to buy a home, it might be tempting to rush and buy while rates are low and on the rise. Or, you may put off buying a home until rates decrease in the future. However, you never want to time the market. As mentioned above, mortgage rates are near historic lows and are constantly fluctuating, so choosing the perfect time to buy a home based on the ideal rate can be difficult.

Additionally, there are many factors to consider when buying a home beyond the mortgage rate. It’s important to understand all aspects of your finances, personal situations, and housing market trends before buying a home.

If you think you’re ready to buy a home, SoFi can help. With SoFi Mortgage Loans, you can find a competitive rate even in a rising rate environment. Turn your dream home into a reality with flexible terms, competitive mortgage rates, and down payments as little as 3% for qualified first-time homebuyers.

If you’re interested in taking out a mortgage, check out SoFi Mortgage Loans today.


SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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How Much Does a Home Inspection Cost?

How Much Does a Home Inspection Cost?

It may not be required by law or your lender, but if you’re purchasing a home, you’ll likely want to consider getting a professional home inspection, which can cost a few hundred dollars.

You may even choose to make your contract contingent on the results.

A basic home inspection typically ranges from $300 to $500, according to the U.S. Department of Housing and Urban Development, and it’s almost always the buyer’s cost to cover.

Here’s what you can expect to get for your money.

What Do Home Inspectors Do?

In the recent frenzied real estate market, which has included sight unseen home buying, some buyers have taken the risk of waiving the home inspection.

But certified home inspectors are trained to find the problems you might not see when you walk through a home that’s for sale (even if you’ve seen the property multiple times).

Many states require inspectors to be licensed, and there are several professional organizations that require their members to follow certain standards of practice. Two of the largest national organizations for certified inspectors are the International Association of Certified Home Inspectors (InterNACHI) and the American Society of Home Inspectors (ASHI), but there are also many state associations.

The goal of a professional inspection is to help you avoid being surprised by structural defects, plumbing and electrical issues, or other significant problems with a home you plan to buy. Here are just a few of the things on a home inspection checklist that an inspector will look at.

Roof Condition

Inspectors aren’t required to stand on a roof to inspect its condition, but they will review the materials used to cover the roof; the gutters and downspouts; any vents, flashing, skylights, etc.; and the general structure of the roof. And they’ll report any evidence of active leaks.

Exterior

This part of the inspection will generally include the exterior walls; the eaves, soffits, and fascia; windows and doors (including garage doors); walkways and driveways; stairs, steps, and ramps; porches, patios, decks, and the like; railings; and any issues that could cause problems with water intrusion.

Structural Soundness

This typically includes looking for cracks or other problems with the home’s foundation, the basement or crawlspace, and other structural components.

Heating and Cooling

The inspector will report on the types of systems used to heat and cool the home and if they are in working order.

Plumbing

This may include checking the main water supply shut-off valve and water heater; running the faucets and flushing all toilets; and reporting drainage problems for sinks, tubs, and showers. The inspector will look for damage, loose connections, leaks, and equipment that wasn’t properly installed.

Electrical

Besides checking a representative number of switches, light fixtures, and receptacles, the inspector will look at the type of wiring used in the home, the electrical panel, the main service disconnect, and any equipment that wasn’t properly installed or repaired. The absence of smoke detectors and carbon monoxide detectors also will be noted.

Insulation and Ventilation

The inspector may note any issues with the insulation used in the home, including the depth and type, and the exhaust systems in the kitchen, bathrooms, and laundry room.

What Isn’t Included in a Basic Home Inspection?

A basic inspection is a noninvasive, visual assessment of accessible areas of the property, so inspectors may not move rugs, furniture, or other items that block their view. If there’s a problem behind a wall or under the floors, the inspector may not catch it. And you shouldn’t expect the inspector to predict how long the roof, appliances, or HVAC system might last.

You may have to hire specialists, and that could add to your overall costs. Specialized inspections might include looking at the swimming pool, fireplace chimney and flue, a well and/or septic tank, and detached sheds and garages. You also may choose to get separate inspections to search for mold, termites, asbestos, lead paint, or radon gas, and to check for municipal code compliance.

While the cost of a single-family home inspection normally ranges from $300 to $500, the price can go significantly higher depending on the home’s square footage and the addition of specialized inspections.

You’ve probably already looked at numbers with a mortgage calculator or plan to. That’s more money you’ll need to come up with before or during your closing.

Why Get a Home Inspection?

A home inspection can cost hundreds of dollars, but getting one could save you thousands. After all, the home you’re buying could be the biggest investment you’ve ever made.

Once you receive your inspection report, it will be up to you to decide if and how you want to move forward with the purchase.

As a buyer, you may have a few options, including:

•   If there are problems, you can give the seller a list of requested repairs (based on the inspection, not your taste) that must be completed and paid for as a condition of the sale

•   You may request a credit, or a concession, that gives you enough to pay for the necessary repairs yourself

•   You could back out of the deal altogether

You don’t have to do anything, by the way. If you want the home and you think the price is fair, you can proceed with the transaction even if the report lists major issues.

Especially in a hot seller’s market, you may not be able to use the report as a negotiation tool to lower the price or get the seller to pay for repairs. Still, you’ll have the information you need to make the best decision for your personal needs and goals.

Home Inspection Pros and Cons

Pros

Cons

Can give you an unbiased evaluation of the home you hope to buy Adds a cost to the already expensive home buying process
Can help you decide if repairs are in your DIY skill set or would require a pro Waiving the inspection is risky (even if it makes your offer more appealing in a seller’s market)
May help you assess if the asking price is fair or if you should negotiate
May enable you to ask the seller to make repairs before you buy

Is an Inspection Necessary for a New or Renovated Home?

It might be tempting to waive the inspection if you’re buying new construction or a home that looks new thanks to a remodel. Fresh paint, that “new home smell,” and some professional staging can be a distraction for eager buyers. But even new construction can have problems, and an inspection can help find red flags.

What Factors Into the Price of a Home Inspection?

When you’re shopping for an inspector, you may want to ask for a written estimate of how much you’ll be charged and a breakdown of costs. Here are some things that could affect the price:

Size

The larger the home, the longer it could take to complete the inspection and the inspection report. Here’s a breakdown of approximate costs based on square footage:

Home Size

Approximate Cost

Under 1,500 sq. ft. $250
1,500 to 2,500 sq. ft. $325
2,500 to 3,000 sq. ft. $380
3,000 to 4,000 sq. ft. $420
Over 4,000 sq. ft. $500-plus

Age

Because it may take more time — depending on the condition of the home and the design — the inspection for an older home may cost more than for a newer build of the same approximate size.

Location

If the inspector must travel a long distance to get to the home, the cost estimate may be higher. (The inspector may charge by the mile or a negotiated amount.)

The Inspector

How much experience does the inspector have? Are they licensed by your state and/or certified by a professional association like ASHI or InterNACHI? You may have to pay extra for this expertise.

Additional Costs

The first price you’re quoted may not be the final price you’ll pay for an inspection. If you want additional inspections that require more expertise or specialized equipment, you can expect to pay much more. Inspecting detached structures on the property also may increase the price. Ask about those separate costs and if they’ll be listed on your written estimate.

How Long Does an Inspection Take?

A home inspection typically takes two to three hours onsite, and you may have to wait one or two days to get your inspection report. You may find it helps to research inspectors even before you find a home so you can move quickly when you’re ready to buy. That way you’ll have plenty of time to read the report and decide what you want to do about any points of concern.

Home inspection contingencies, which can allow buyers to get out of the contract if they find something they don’t like, usually have a tight deadline. You may have to send formal notice to the seller that you’re canceling the contract within seven days after signing the purchase agreement.

Are Any Fixes Mandatory After an Inspection?

A home inspector’s report isn’t a list of “must-dos.” Most repairs are negotiable. And you may decide not to press the seller for any fixes.

In some cases, a buyer may be denied financing or insurance if the bank or insurer isn’t satisfied with the results of an inspection and the planned repairs. Those items likely would include dangerous structural or electrical defects and/or building code violations.

Tips on Choosing an Inspector

Word-of-mouth references can be a great place to start when you’re looking for a home inspector. There are also plenty of online sites that can help you find local inspectors.

Once you have a few names, you can:

Look for Online Reviews

There are several sites that list inspectors, and some offer reviews. You also can ask the inspector for references.

Check Credentials

Is the inspector a member of a professional organization? You may want to ask to see a membership card. And don’t forget to ask for proof of licensing if it’s required in your state.

Ask About Experience

How long has the inspector been in the business? Experienced inspectors likely will have seen several types of homes and know where to look for problems.

Get Pricing Information

You can start by asking about the cost of a basic inspection and what it includes, then go from there. If the inspector does specialized tests you’re interested in (for mold, radon, asbestos, etc.), you can request to have those costs included in the estimate.

Compare Sample Reports

One way to gauge an inspector’s work may be to look at a past report and compare it to other companies’ reports.

Set the Date

Keep your timeline in mind as you consider who to hire. Things can move quickly in the mortgage process, and you don’t want your inspection to hold up the deal.

Try to be there when the inspector is working so you can see the home through an unbiased lens. If you can’t be there, you may want to ask your real estate agent to attend.

The Takeaway

It might be tempting to skip the home inspection to save money or time, or to make your offer more appealing. After all, the average home inspection cost is $300 to $500 and could go higher. But a home inspection can provide an important layer of protection.

3 Home Loan Tips

  1. Traditionally, mortgage lenders like to see a 20% down payment. But some lenders, such as SoFi, offer mortgages with as little as 3% down for qualifying first-time homebuyers and 5% down for other buyers.
  2. Your parents or grandparents probably got mortgages for 30 years. But these days, you can get a home loan for 20, 15, or 10 years — and pay less interest over the life of the loan.
  3. Not to be confused with pre-qualification, pre-approval involves a longer application, documentation, and hard credit pulls. Ideally, you want to keep your applications for pre-approval to within the same 14- to 45-day period, since many hard credit pulls outside the given time period can adversely affect your credit score, which in turn affects the mortgage terms you’ll be offered.


Photo credit: iStock/Altayb

SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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What Happens When You Pay Off Your Mortgage?

What Happens When You Pay Off Your Mortgage? All You Need to Know

Is a paid-off mortgage in sight? Hooray for you! Greater monthly cash flow and less stress are coming your way. But hold up: Is hurrying to pay off a mortgage always the smartest move, and is refinancing something to consider?

Although paying off your mortgage is certainly an achievement, there are some things you need to do before you complete the process, if payoff is the path you’ve chosen.

Pros and Cons of Paying Off Your Mortgage

Paying off your mortgage is a fantastic milestone to reach, but it’s not without trade-offs. Here are a few considerations to help you make the best decision for your situation.

Pros of Paying Off a Mortgage

Cons of Paying Off a Mortgage

No monthly payment
No more interest paid to the lender Your cash is all tied up in your home’s equity
More cash in your pocket each month If you pay extra to pay off your home, you may miss out on investment strategies
You’ll need less income in retirement Lost opportunity costs for other uses for your money
Greatly reduced risk of foreclosure No tax deduction for mortgage interest, if you’re among the few who still take the deduction

What Happens When You Pay Off Your Mortgage?

To get the amount you need to pay off your mortgage, the first thing you need to do is request a mortgage payoff letter. If you pay the amount on your last statement, you won’t have the right amount. A mortgage payoff letter will include the appropriate fees and the amount of interest through the day you’re planning to pay the loan off.

The payoff letter is only good for a set amount of time. You’ll have instructions on where to send the payment.

Once you’ve sent the payoff amount, your mortgage company is responsible for sending you and the county recorder documentation to release the mortgage and lien on your home.

What Documents Do You Get After Paying Off a Mortgage?

After paying off your mortgage, you should receive (or have access to) documents proving you paid off the mortgage and no longer have a lien attached to your home. These include:

•   Satisfaction or release of mortgage. This document will be filed with the county recorder (or other applicable recording agency). It states that the mortgage has been satisfied and the lien released.

•   A canceled promissory note. When you closed on your home, one of the documents you signed was called a promissory note. Now that the mortgage has been satisfied, you may receive this document back with a “canceled” or “paid in full,” though it’s also possible you may have to call and request the document.

•   A statement on the paid-off loan balance. Your lender should send you a statement showing that your loan has been paid in full.

What Should You Do After Paying Off Your Mortgage?

After you pay off your mortgage, you’ll need to take care of a few housekeeping items.

•   Close your escrow account. Since you’re no longer sending a mortgage payment to a mortgage servicer, you’ll need to take care of the items in your escrow account, primarily your taxes and homeowners insurance.

•   Contact your county recorder’s office to double-check that the mortgage satisfaction paperwork has been filed. Once that has been filed, you will have a clear title on the property.

•   Make plans for the extra money. Whether you want to make a bigger push in your retirement account, enlarge your emergency fund, or pay off other debts, you now have more cash to do it with. If you don’t make plans for the extra money, it might just evaporate.

Want to know more? You can find more online content at our mortgage help center.

Is Prepaying a Good Idea?

Generally, paying off your mortgage early is a great idea. It reduces the principal, which in turn reduces the amount you’ll pay in interest over the life of your loan. Still, there are reasons that some homeowners consider not paying their mortgage off early.

Most lenders do not charge a prepayment penalty, but home loans signed before Jan. 10, 2014, may include one, and nonconforming mortgage loans signed after that date may have a prepayment penalty that applies within the first three years of repayment. (The different types of mortgage loans include conforming and nonconforming conventional mortgages.)

The best way to find out if prepayment is subject to a penalty is to call your mortgage servicer. The terms of your mortgage paperwork should also outline whether or not you have a prepayment penalty.

Should You Refinance Instead?

Another option you may consider is refinancing your mortgage. There are several reasons you may want to refinance instead of paying off your mortgage.

Lower monthly payment. Getting a lower rate or different loan term may lower your monthly payment. Be sure to check out current rates and this calculator for mortgages to find out what a possible new payment would be.

Shorter mortgage term. Refinancing a 30-year mortgage to, say, a 15-year mortgage can keep you close to paying off your mortgage while also providing financial flexibility.

Spare cash. Whatever your need is — home renovations, college funding, paying off higher-interest debt — a cash-out refinance might be an option.

The Takeaway

What happens when you pay off your mortgage? After doing a jig in the living room, you’ll need to take care of a few housekeeping tasks and make plans for the extra money.

Would a refinance to a shorter term make more sense, or pulling cash out with a cash-out refi?

Whatever you decide, SoFi stands ready to help. Whether you want to apply for a mortgage or looking to refinance, our experts can answer all your mortgage questions.

Find out more about SoFi’s home financing options and get your rate on refinancing with no obligation.

FAQ

Is paying off your mortgage a good idea?

The answer depends on an individual’s situation. If you have the money and you’d love to shed that monthly obligation for good, paying off a mortgage is a good idea.

If you’re worried about funding your retirement or losing opportunities to invest, paying off your mortgage may not be a good idea for you.

What do you do after you pay off your mortgage?

Ensure that you have received your canceled promissory note, and update your property tax and insurance billers on where to bill you. Since you no longer will have a mortgage servicing company, you must pay your insurance (if you choose to keep it) and property taxes yourself.

Is it better to pay off a mortgage before you retire?

Paying off a mortgage will give you more to work with in retirement since you’re not paying a mortgage, of course. But if your retirement accounts need a boost, most financial experts contend that allocating money there is a better idea than paying off your mortgage.

Paying off a mortgage when you have low cash reserves can also put you at risk.

Does paying off your mortgage early affect your credit score?

Surprisingly, paying off your mortgage early won’t affect your credit score much. Your credit score has already taken into account the years of full, on-time payments you made each month.


SoFi Loan Products
SoFi loans are originated by SoFi Bank, N.A., NMLS #696891 (Member FDIC), and by SoFi Lending Corp. NMLS #1121636 , a lender licensed by the Department of Financial Protection and Innovation under the California Financing Law (License # 6054612) and by other states. For additional product-specific legal and licensing information, see SoFi.com/legal.

SoFi Mortgages
Terms, conditions, and state restrictions apply. Not all products are available in all states. See SoFi.com/eligibility for more information.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Photo credit: iStock/katleho Seisa
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