After hitting record lows during the pandemic, foreclosure activity in Indiana is starting to creep upwards again as homeowners struggle with mortgage payments. Indiana saw 5,289 properties receive foreclosure filings in Q1 2023, a 33% increase from a year earlier according to Attom Data (2023). This represents the third straight quarter of rising foreclosures in the state.

The foreclosure uptick coincides with slowing home sales and eroding affordability across Indiana (Indiana Association of Realtors, 2023). Rising interest rates in 2022 have pushed monthly mortgage payments significantly higher, while inflation continues to eat into household budgets. This makes it harder for some homeowners to keep up with housing payments.

Nationally, early-stage delinquencies on mortgage payments rose to 3.1% in Q4 2022, the highest level since 2010 (CoreLogic, 2023). In Indiana, the delinquency rate also increased but remains below the national average at 2.7%, suggesting some equity buffers for homeowners (CoreLogic, 2023).

Still, experts warn higher delinquencies are a precursor to more Indiana homeowners falling into foreclosure over the next year. The state also faces particular risk; a recent WalletHub study ranked Indiana 6th highest for foreclosure risk due to lower credit scores and high late mortgage payments (2023).

To prevent a significant foreclosure wave, policymakers have called for enhanced homeowner assistance and mortgage modification programs. But with layoffs rising and recession likely, many Indiana communities brace for the difficult possibility of more residents losing homes in 2023.

References

Attom Data Solutions. (2023). Q1 2023 U.S. Foreclosure Activity. Attom Data Solutions.

CoreLogic. (2023). CoreLogic Reports Homeowner Equity Declines in Q4 2022. CoreLogic.

Indiana Association of Realtors. (2023). January 2023 Housing Data. IAR.

WalletHub. (2023). 2023’s States Most Vulnerable to Foreclosures. WalletHub.