by Calculated Risk on 12/04/2025 10:46:00 AM
Today, in the Calculated Risk Real Estate Newsletter: Q3 Update: Delinquencies, Foreclosures and REO
A brief excerpt:
Even with the recent weakness in house prices, it is important to note that there will NOT be a surge in foreclosures that could lead to cascading house price declines (as happened following the housing bubble) for two key reasons: 1) mortgage lending has been solid, and 2) most homeowners have substantial equity in their homes.
With substantial equity, and low mortgage rates (mostly at a fixed rates), few homeowners will have financial difficulties.
But it is still important to track delinquencies and foreclosures.
…This graph shows the nominal dollar value of Residential REO for FDIC insured institutions based on the Q3 FDIC Quarterly Banking Profile released in late November. Note: The FDIC reports the dollar value and not the total number of REOs.
The dollar value of 1-4 family residential Real Estate Owned (REOs, foreclosure houses) was up 24% YOY from $765 million in Q3 2024 to $951 million in Q3 2025. This is still historically very low, but increasing.
This graph shows the nominal dollar value of Residential REO for FDIC insured institutions based on the Q3 FDIC Quarterly Banking Profile released in late November. Note: The FDIC reports the dollar value and not the total number of REOs.There is much more in the article.
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