RealtyTrac™ has released its first annual 2006 U.S. Metropolitan Foreclosure Market Report, which ranks the foreclosure rates of the top 100 metropolitan areas. This year’s report, based on data captured over the first quarter of 2006, shows Indianapolis, Atlanta and Dallas having the highest foreclosure rates among the nation’s largest 100 metropolitan areas. Cities in the Sun Belt and Rust Belt generally had the highest foreclosure rates in the first quarter of 2006, while cities in the Northeast and Gulf Coast documented some of the lowest.
"Indianapolis documented a foreclosure rate of one foreclosure for every 69 households, while Atlanta’s foreclosure rate was one foreclosure for every 70 households. Other top-10 foreclosure rates ranged from one foreclosure for every 99 households in Dallas-Fort Worth to one foreclosure for every 140 households in Canton, Ohio and Las Vegas."
The Lehigh Valley (PA) area ranks 81 on the list.
“Indianapolis narrowly edged out Atlanta as the city with the highest foreclosure rate in Q1,' said James J. Saccacio, chief executive officer of RealtyTrac. 'Most of the cities with the highest foreclosure rates have above-average unemployment rates and below-average home price appreciation. Unemployment is a major reason why homeowners stop making mortgage payments, and slow home price appreciation can make it harder for homeowners in default to refinance or sell to stop foreclosure.'
"Saccacio added that other economic factors such as decreasing affordability, rising interest rates and speculative buying can also fuel foreclosures. He cited Jacksonville, Fla. and Las Vegas Nevada, both of which documented foreclosure rates in the top 10 despite below-average unemployment and above-average home price appreciation.“Because of the high home prices in many areas, more home buyers have stretched themselves financially with creative, and often risky financing that involves adjustable interest rates, interest only and negative amortization loans' he said. 'Home buyers with these types of loans are more susceptible to default and foreclosure when interest rates move higher."