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Changes To Real Estate Tax Deduction 2018

As a homeowner, your ability to deduct mortgage interest from your tax return makes real estate one of the best investments.

The tax bill that will be in force in the up and coming tax season, the Tax Cuts and Jobs Act (TCJA), has made some dramatic changes to the tax law. Here’s a summary of the changes:

TCJA Items to Watch in 2018
When the TCJA was pushed through Congress in December 2017, many people were up in arms. The overhaul, they said, was going to be problematic for many reasons, which, we’ll see how that pans out. It does seem that when it comes to real estate, the TCJA is going to make it tough for homeowners to lower their taxes.

These are the top items you’ll want to pay close attention to this year:

Item #1: SALT

The state and local tax deduction (SALT) is set to be a problem for homeowners in high-tax areas. In the past, you could claim an unlimited amount of already-paid personal state and local income taxes, as well as your property taxes, as a deduction to offset your tax bill. From now until 2025, you’ll only be able to use your Schedule A to itemize $5,000 worth of these taxes if you’re single or married filing separately and $10,000 for married filing jointly.

This looks like an issue for many people in those high tax areas on both coasts, but for some, the increase of the standard deduction to $12,000 for singles or $24,000 for couples may balance the equation.

Item #2: Your Mortgage Interest Deduction

If your home was purchased after December 14, 2017, you will be subject to the new limits on mortgage interest deductions. Instead of being able to deduct the interest on up to a $1,000,000 mortgage, you’ll be capped at the interest on only $750,000. If you are in the less expensive parts of the country, this is probably not an issue. But, those of you living close to the coast may have to pay more.

According to a Zillow report published shortly after the TCJA passed, “Under the current setup [Pre-TCJA], roughly 44 percent of U.S. homes are worth enough for it to make sense for a homeowner to itemize their deductions and take advantage of the mortgage interest deduction. Under the new bill (as reported), that proportion of homes drops to 14.4 percent. Interest on second/vacation homes will remain deductible, but will also have a ceiling of $750,000.”

Item #3: Home Equity Loan Interest Deductions

Bad news for people who bought their home with a home equity loan. If you purchased a house with a home equity loan, you might lose your deduction this year. The TCJA says that unless your home equity loan was used for home improvements, it’s no longer allowed.

It is unclear, however, how the IRS will identify where you spend your funds, especially if the loan was 10 to 15 years.

Item #4: Gains From Home Sales Still Protected

The very beneficial home sale gain exclusion remains. You’ll still be able to exclude up to $250,000 ($500k for married filing jointly) of gain from a home you’ve owned and used as a primary residence for at least two of the last five years.

Taxes and Real Estate
Even though taxes may go up, real estate is still one of the best investments you can make due to the stability it has. Home prices continue to rise, even with the threat of fewer tax deductions.

Tips For Choosing A Home Inspector

You have finally have your home in escrow and couldn’t be more excited. But, when your Realtor calls to ask you who you want to use for your home inspection, you freeze. Do you get to pick your own home inspector? How do you even go about doing that?

Choosing a home inspector isn’t a difficult process, but as usual, we have tips to help you make it even easier.

When you don’t have an existing relationship with a home inspector, your Realtor will likely present you with a list of pros that they recommend highly. But, you need to research for yourself and find out who is the best inspector for your particular home.

Some Helpful Tips:

1. Make sure that all potential inspectors are members of the American Society of Home Inspectors. This group has been accrediting home inspectors for more than 40 years and requires that inspectors complete at least 250 inspections before they can call themselves “certified.” It’s a high achievement for a home inspector and a confidence builder for their clients. You want someone who won’t just do the minimum work, but go the extra mile to assure your home is or isn’t in good shape.

2. Ask what inspections they perform. Some home inspectors only do a general home inspection, which won’t be as thorough. But because home inspectors come from all areas of the construction industry, some have specific expertise that can be helpful in finding problems that you probably didn’t notice when you walked into the home of your dreams.

3. Have they inspected houses similar to yours? Houses built in the early 1900s cannot be held to the same standards as houses built in the 2000s. Not only are construction techniques very different, but the sort of strange upgrades that may have been made to the older home also would never be seen in a newer house. An inspector that has little to no experience with a house like yours may flag things wrong that are common for a home of that age. You don’t want to get your inspection back and panic because your inspector held an older house to a newer standard, for example.

4. Do they provide photos within their reports? There’s no standard format for a home inspection report, though there are a limited number of software packages for inspection companies. They have a lot of options, including providing optional photos of trouble spots or other items the inspector may feel needs pointing out. You want a home inspector that will put in the extra time to send you photos to more easily monitor the problems with your home.

5. How soon can they come out? It might seem like a silly question, but you’re very likely working with a limited window of time to ask for repairs. That means the sooner your new home inspector can get out, the better. It takes hours to complete a thorough home inspection. You also never know if you will need to make major changes to the home. If you’re down to your final cut and one can come out tomorrow and the rest can’t until next week, it’s an easy call.

Starbucks Tends To Boost Housing Prices

In a study done by Harvard Business School, each new Starbucks boosts the value of housing prices in a neighborhood. And not by a small amount.

A new Starbucks introduced into a ZIP code reported a 0.5 percent increase in home prices. It’s not clear whether housing prices are rising due to the Starbucks, or just because the Starbucks is bringing more affluent people to the area.

Harvard economics professor Edward Glaeser said Yelp data reveals it may be the latter. The study found that each 10-unit increase in the number of reviews is associated with a 1.4 percent increase in housing prices in the ZIP code.

“The most natural hypothesis to us is that restaurants respond to exogenous changes in neighborhood composition, not that restaurant availability is driving neighborhood change,” the paper concludes.

Gentrification is associated with grocery stores, restaruants, and generally more expensive activities. The people will go where they feel is a perfect balance between fun and affordability.

A hot topic in policy debates worldwide, gentrification is defined as the process of rebuilding homes and businesses accompanied by an influx of middle-class or affluent people at the expense of earlier, often more impoverished residents. The lack of consistent data is the main issue in determining if the effects of gentrification are positive or negative.

This study shows that there are better ways to analyze the growth of gentrification.

“Economists have long used government data from statistical agencies such as the Bureau of Labor Statistics and Census Bureau for analyzing policy and the economy — these data sources are invaluable but come with important limitations,” Michael Luca, an associate professor at HBS, told CNBC in an email.

Data collected from Yelp compliments the existing data by providing real-time updates on local stores as well as an insight into how neighborhoods change during gentrification.

“Yelp data has the advantage of being more up to date than most official government statistics,” the economist added. “It also contains metrics on things like cuisine, prices, and ratings that can be difficult to observe otherwise.”

“Yet, it seems true that Yelp establishments from 2007-2011 predict changes in education levels over the next five years, but education from 2007 to 2011 does not predict increases in the number of Yelp establishments, once we control for the initial level of Yelp establishments.”

So Starbucks may not be causing gentrification, but its arrival may confirm the gentrification trend. One of the reasons gentrification is becoming more common, is because of the expansion of Starbucks.

“The presence of a Starbucks is far less important than whether the community has people who consume Starbucks,” Glaeser writes in the paper. “Consequently, we think that this variable is likely to be a proxy for gentrification itself.”

Tips On Closing Your Pool

Your new home looked terrific with a pool, but as fall rolls in you start to think about how much work it’s going to be to close it for the winter. It’s time to figure out the easiest way to protect your pool.

As you might imagine, a pool that freezes is a pool that’s got a pretty big problem. There’s a lot you can do to prevent this and ensure that your pool is a fun summer oasis for many years to come.

Before You Start Closing, Consider Your Climate
Weather conditions in the place you live are going to decide how much work you’re going to need to put into this pool. Your goal, ultimately, is to keep that pool and its systems from experiencing any sort of freezing. A frozen pipe, a frozen filter, anything like that could be a costly replacement in the spring when you open your pool again.

If you live in a warmer climate where the winters don’t go below 50 degrees Fahrenheit, then you may not want to close your pool all the way. But, if it freezes frequently and there’s lots of snow, well, you’re going to have to break out bigger firepower. This is meant as a general guide to pool closing, that being said, your mileage may vary.

Pool Closing Made Easy
Closing a pool is not difficult if you prepare with the right tools and plan. It can be a complicated situation, though, because of all the parts that you’ll need to check as you go. If you take your time and asses the risks carefully, you will be fine.

These are the necessary steps to closing a pool in a middling sort of climate:

Step 1: Deep clean your pool. Vacuum the entire pool, brush the walls, skim the surface, remove all debris. This way you’re starting fresh again in the spring.

Step 2: Test the water. Check that your pool is balanced correctly before you put it to bed. This means a pH between 7.2 and 7.8 and alkalinity between 80 and 120 parts per million. If you’re running toward the high sides of these ranges, that’s ok. Check the hardness, too, since calcium deposits can form in your equipment over time.

Step 3: Shock the pool. Shocking the pool right before closing will help it stay as clean as possible over the winter. A 15-minute fast dissolving shock treatment is fine since you won’t be using the pool again. If you have chronic algae problems, a winter algaecide will be a good addition. Use the same dose as is listed on the bottle for opening the pool.

Step 4: Time to plug it up. Remove the eyeball fitting on your return line and plug it with an appropriate plug. Take out the skimmer basket and put it into storage. You can leave the skimmer in the pool if you use a winter skimmer cover to protect it from accumulating water. With a skimmer cover, you can also leave more water in the pool, rather than having to drain the pool below the skimmer level.

Step 5: Protecting the moving parts. The pump, chlorinator and all the hoses (including the skimmer hose) need to be drained and brought inside to prolong their lives and protect them from the cold. Filters should be kept indoors.

Step 6: Put the cover on. Start by inflating your air pillow, then tossing it toward the middle of your pool. If you have a hard pool cover or are otherwise concerned about the water level, this is a good time to lower it a bit. Cover the pool and, when needed, install a winter cover pump to keep water from accumulating on the pool’s cover.

Home Remodeling Surges 30%

Home remodels have increased in the past 5 years because baby boomers, instead of buying a new house, are electing to renovate their home due to the rising prices of real estate.

Home remodeling has surged by about 30% in the past five years, according to a report from BuildFax, a provider of property condition and history insights for insurance and financial institutions.

“We are not seeing a large bounce back from the decline in June housing authorizations,” BuildFax Chief Operating Officer Jonathan Kanarek said. “However, we have to remember that all three categories, new housing, remodels, and maintenance, are at historically high levels.”

Kanarek also added that “Remodeling alone is up 30% in the last five years. The slight dip in remodeling volume may be an early indicator of a leveling off of the very hot housing construction market we’ve seen in the last few years. We will be keeping a close eye in the coming months to look for the leveling off trend or a further softening.”

The report showed that single-family housing authorizations increased by just 0.62% from June to July, and by a seasonally adjusted annual rate of 4.77% since July 2017.

However, existing housing maintenance increased at a much faster pace. The annual rate of housing maintenance volume increased by 5.23%, while housing maintenance spends increased at an annual rate of 8.04% in July.

The annual rate of existing home remodels dropped slightly from last year, falling 0.26%, however, remodel spend increased at an annual rate of 8.96%. Homeowners are still willing to spend money on improving their home.

The market shows that homeowners are more willing to remodel, rather than just buy a new home. Earlier this week, home improvement retailer The Home Depot reported an increase in its sales during the second quarter of 2018 as more homeowners choose to age in place and renovate their homes rather than move into a newer home.

The construction industry continues to struggle even as the home improvement sector rises. The latest data from the National Association of Realtors shows job openings in the construction industry hit a post-recession high in June, but no new laborers are stepping up to fill the gap.

As the construction industry fails to keep up, and the median age of owner-occupied homes increases, it has caused a surge in the remodeling market, according to the latest data from the National Association of Home Builders.

Even A Decade After The Financial Crisis, Is Housing Still A Risk?

The current economy is booming, stock market at ultimate highs, unemployment as low as ever, but is housing still a risk? The world has moved on from the 2008 housing crisis which was caused by unethical lending and investing by the big investment banks.

Even though housing looks excellent, some scars from the crisis still show. Leading up to the crisis, lenders were giving loans to anyone with a pulse. Now, lending is stricter. So strict, that some experts believe it is causing a housing shortage which has pushed prices to unbelievably high amounts. This trend has caused a generation of renters.

“We’re really in a hangover phase,” said Jonathan Miller, CEO of Miller Samuel, a real estate appraisal and consulting firm. “Just because prices are rising doesn’t mean we’ve recovered. [The market] is still distorted, and that’s because of credit conditions.”

Shady Mortgage Lending
In the early 2000s, there was a surplus of supply and not enough demand for the houses that were being built throughout the country. Usually, homes were built by small building companies, but, at the time, larger companies started to build homes at a breakneck pace which led to the significant surplus. This activity gave the lenders incentive to give out as many loans as possible, even to unqualified buyers.

Lenders don’t just hold the mortgage and make money on interest; they usually sell the mortgage to a government-sponsored entity such as Fannie Mae and Freddie Mac, or a big investment bank. Those government agencies or big banks then repackage the mortgage with thousands of other mortgages and rename them Mortgage Backed Securities (MBS). And, another reason why lenders were writing an insane amount of loans was that the big banks would buy anything that they wrote.

Lenders came up with creative ways to give out loans such as the “teaser rate” mortgage. The 2/28 subprime adjustable-rate mortgage (ARM). It gave borrowers a below-market “teaser” rate for the first two years. After two years, the interest rate “reset” to a higher rate, which often made the monthly payments unaffordable. The idea was to refinance before the rate reset, but many homeowners never got the chance before the crisis began and credit became unavailable.

Ethical Misconduct by the Investment Banks
The MBS wasn’t where the banks stopped though; they started to bundle up the MBS along with different kinds of debt (car loans, credit card debt, corporate debt, etc.) to create a Collateralized Debt Obligation (CDO). They would sell these CDOs to thousands of investors. This wasn’t the shady part though; the banks wouldn’t buy the loans from the rating agencies (Fannie Mae, Freddie Mac, etc.) unless they gave them the credit rating they wanted (“AAA” being the highest and “B” being the lowest). Some of the loans that were being rated “AAA” were actually “B”s. These type of loans are called subprime loans.

The banks kept on selling these CDOs and loans and made millions and millions through this unethical activity. This created a massive housing bubble that led to the big crash in 2008.

Delinquency Rates
The teaser loan that the lenders gave out caused major havoc in the subprime department because homeowners couldn’t refinance their mortgage before it became unaffordable. As soon as homeowners stopped making payments, the bonds started to fail, and the banks began to take significant losses.

Delinquency rates for subprime loans sprung to 25-30% in the late 2000s. When homeowners stop making payments on their mortgage, the payments also stop flowing into the mortgage-backed securities. The securities are valued according to the expected mortgage payments coming in, so when defaults started piling up, the value of the securities plummeted.

In 2007, two prominent hedge funds at the investment bank Bear Stearns imploded due to substantial exposure to MBSs and derivatives backed by MBSs, and the bank was purchased in March 2008 by JPMorgan Chase for a bargain-basement price of $2 per share. This catastrophe let the world know that a disaster was looming.

Due to the uncertainty in the market, Rating agencies’ stocks plummeted and the Bush Administration had to step into Wall Street and do something.

As the world waited to see which bank would be next, suspicion fell on the investment bank Lehman Brothers. Companies stopped doing business at the bank, and while the government helped broker the sale of Bear Stearns to JPMorgan, it let Lehman Brothers fail. On September 15, 2008, the bank filed for bankruptcy. The next day, the government bailed out insurance giant AIG, which in the run-up to the collapse had issued staggering amounts of credit-default swaps (CDSs), a form of insurance on MBSs. With MBSs suddenly worth a fraction of their previous value, bondholders wanted to collect on their CDSs from AIG, which sent the company to failure.

How Is Housing Now?
A lot has changed since the housing market collapsed, including lending. Mortgage lenders have become so strict that younger generations have turned to rent. The housing market is currently stable, and delinquency rates are low, but there are still some problems with the supply and demand of housing. There are still some concerns about how quickly homes are being built. The fast-paced building was one of the causes of the crisis in 2008. But, as of right now, there are no major concerns in the housing market.

How To Fix Household Drains

What would you do if, one day, you walked into your bathroom and realize your sink was almost overflowing? Well, you could freak out, or rad a helpful blog like this one to help you solve the problem.

Your Basic Clog-Clearing Toolkit

Depending on the age of your home and the type of pipes in your plumbing system, any of these items may be useful to keep around the house:

Rubber gloves. The stuff that is causing the clog is probably not safe to touch…

Bucket. Buckets are good for many things, including bailing out tubs and keeping clogged drains from dripping all over when you take them apart.

Hand plunger. These tiny plungers are great for sinks and tubs. Make sure you have caps for any double sinks in your house to help you create a strong vacuum to unclog the issue.

Pipe wrench. When your sink trap is the source of the clog, this is all you need.

Manual auger. When the going gets tough, or your drain is clogged a little bit deeper than a plunger can handle, sending an auger into the pipe can help you get things moving again. The longer the auger’s line, the further you can reach. Some are even made to hook to a power drill, giving you a little extra torque and leverage.

What’s not on this list, you may notice, is a chemical drain cleaner. There are several reasons for this. First, chemical drain cleaners can also cause pipes to corrode from the inside. When that happens, bits of rust can break off over time and cause a really hard clog that’s impossible to remove on your own. Secondly, if you do need to call in a pro, or you get fiesty and want to give the drain another go, the standing water will be caustic.

Time to Get To the Drains!

Here’s the order you should approach cleaning a drain:

Step 1: Remove any drain covers or plugs.

Step 2: Use a flashlight to look inside the upper part of the drain. If you see hair or other debris plugging the way, put on gloves and pull it out. For stuff that’s really stuck, try a pair of needle nose pliers to get a better grip.

Step 3: If you don’t see anything immediately clogging the drain, open the trap and clear it out with a burst of water from another faucet that doesn’t drain using that particular trap.

Step 4: Nothing in the trap? Take the manual auger and feed it into the drain with the trap still detached, going into the wall. You’ll be flying blind here, so go slow and easy. Keep feeding the line until you meet the obstruction or run out of line. When you do find the clog, you will be able to punch a hole in it by rotating the feed line rapidly. Once the feed line moves smoothly, withdraw it from the drain line.

Step 5: Put everything back together and test the drain line by running the water again.

If you still have standing water, you have a few options. You can plunge until you’re exhausted. You can also try repeating the steps above in case there is a clog deeper in the drain that you just missed.

This technique will work for most types of household drains, though those encased in cement or that drain up from a basement are a lot more complicated and will probably require a pro to unclog.

Drain Problems Gotcha Down?

Whether your drain issue is complicated, it’s inside a floor or you just really don’t want to deal with it on your own, there’s always someone to help in your HomeKeepr community. Log in and see who your Realtor recommends to fix your clog. You know they’re gonna be great because your agent works with them regularly and is familiar with their high quality workmanship.

Shifts In The Housing Market

With the housing market shifting in a new direction, home sellers have begun cutting back their listing prices, especially at the more high end of the market, leaving open the possibility that it is now starting to shift into a buyer’s market. Around 14.2% of homes listed for sale on Zillow saw a price cut in June, up from a recent low of 11.7% at the end of 2016, according to new data released. Homebuyers should be absolutely ecstatic.

Sellers are being forced to negotiate because of the low affordability in today’s market; few buyers are willing to pay the full asking price. A new report from CNBC sums it up claiming, “After several years of rich home price gains, the market appears to have found a limit to what people can afford. Sellers are finally responding by lowering prices more often.” This momentum is exactly what is needed for a change that could result in quite a bit of relief for buyers who have been in the hot seat of fierce competition to land a reasonable deal. On this, Aaron Terrazas, Zillow senior economist, comments, “The housing market has tilted sharply in favor of sellers over the past two years, but there are very early preliminary signs that the winds may be starting to shift ever-so-slightly.” Experts point to multiple determining factors including rising unaffordability and rising interest rates.

CNBC looks back for insight reporting, “The simple reason was supply and demand. As millennials aged into their home-buying years, homebuilders did not and are still not meeting the rising demand. Also, millions of single-family homes lost to foreclosure were purchased by investors and turned into single-family rentals, further depleting the for-sale housing stock. The market was thus suffering a critical shortage, just as demand was taking off. Prices had nowhere to go but up. Until now.” Sellers are being forced to suck it up and cut their prices due to the lack of breathing room in the market. This shift can be frustrating for sellers, but the housing market is spiraling out of their control.

Given some seemingly good news for buyers, the fact remains that market high ends are seeing the most effective concerning price cuts while, in some areas, the lower end markets are less affected. On this note, Terrazas specifies, “A rising share of on-market listings are seeing price cuts, though these price cuts are concentrated at the most expensive price-points and primarily in markets that have seen outsize price gains in recent years.”

Further to this point, when analyzing the data, clarifies, “But this increase is coming from the top end of the market, rather than starter homes, where real relief is needed. The data shows that for homes priced in the top one-third of all homes listed for sale, those with a price cut increased 0.9% to 16.2% annually in June.” Without a doubt, some markets are shifting more drastically than others, but the changes are showing almost everywhere. For example, “In San Diego, 20 percent of all listings had a price cut in June, up from 12 percent a year ago,” leaving some realtors to notice a exchange of power to the buyer, according to CNBC. Slowly but surely, with a return to normal trends, all signs point to some relief ahead for future homebuyers.

Does Your School District Affect Your Home’s Value?

The value of a home takes a series of calculations roughly based on the cost of actual construction plus value-adds like proximity to shopping and other conveniences. Comparisons to other nearby homes are also taken into consideration.

A school district is one thing that almost always affects a home’s value for the buyer.

The Numbers Have It
A quick search on the internet can prove one thing; better school districts can increase the value of your home. A study from the Federal Reserve Bank of St. Louis found that schools that were just below the average for quality did not influence the homes where their students lived. These houses were priced based solely only on their characteristics. On the other hand, better school districts increased the price of the home well beyond the physical characteristics of the house.

The National Association of Realtors reports that 26 percent of all buyers chose their house based on the school district’s quality. However, among age groups prime to have children in the household, 40 percent of those under 36 years of age considered the school district an influential factor, as did 35 percent of those buyers 37 to 51. A surprisingly high percentage of buyers consider school districts to be a factor when buying a home.

How Much More Will You Pay?
Trying to figure out how much more you will pay is more complex than it seems because there will most likely be another buyer who really needs a house in that school district. This year in the Dallas-Fort Worth, Texas metroplex, for example, homes were frequently being sold for more than their listed price because someone out there had to have that house in that location and right now.

But, you can still look at price trends for homes in a very general and rational way to get a feel for the influence of school districts. The Washington Post reported on a vast study by Redfin that included 407,000 home sales and almost 11,000 elementary school districts across 57 metropolitan markets. The study’s goal was to determine the average additional value brought to homes by their school districts.

The results were astounding because top rated school districts increased that value of a home by $50 per square foot. That’s an extra $100,000 for a 2,000 square foot home! The effect in California’s hottest markets was even more dramatic, with buyers paying up to $500,000 more for the best districts.

Compromises: School or Shopping?
When announced its findings from a back to school survey in 2013, a few trends popped up. For example, buyers were more than happy to make significant sacrifices to get their kids into a great school district. Of the people surveyed and indicated that school boundaries were an essential factor in their search (90.53 percent), 42 percent would give up parks and trails, 43.96 would give up a bonus room, 50.6 would give up easily accessible shopping, and 62.39 percent could live without a pool or spa. School districts would directly affect 3 out of 5 buyers.

Breaking It All Down
All of this may sound quite complicated, but it’s actually pretty straightforward. There are a limited amount of houses in the best school districts, and there are more buyers than homes in those districts. Since school districts are so important to many buyers, bidding wars on houses are common.

It’s a snowball effect. Those way-over-asking-price homes end up being comparable homes when the appraiser comes around a few months later, raising the prices of all the houses around them. So, authentically, it can be said that your school district, if it’s a good one, has a significant impact on your home’s value.

Where Can You Go for Advice on Buying or Selling in a Hot School District?
Your HomeKeepr community is a wealth of tips for homeowners. From buying your first house to having a home inspection, getting help with a tax reassessment, or having someone out to repair the gutters, you’ll have your choice of the best home pros in your area. Log in today to find the people who can help you navigate through the home-buying process.

Foreclosures Continue To Increase

According to ATTOM Data Solutions’s U.S. Foreclosure Market Report, foreclosures increased from a year ago in 96 of the 219 metropolitan statistical areas (44 percent). ATTOM Data Solutions is the curator of the nation’s premier property database. These studies show constant increases in foreclosures all over the United States.

A stunning 30,187 U.S. properties started the foreclosure process for the first time in July, up 1 percent from the previous month and up less than 1 percent from a year ago — the first year-over-year increase in foreclosure starts following 36 consecutive months of decreases. These studies show the high market volatility in the United States

Florida (up 35 percent), California (up 3 percent), Texas (up 7 percent), Illinois (up 7 percent), and Ohio (up 2 percent) all reported increases in foreclosure starts. Metro areas also posted increases in Los Angeles, California (up 20 percent), Houston, Texas (up 76 percent), Philadelphia, Pennsylvania (up 10 percent), Miami, Florida (up 29 percent), and San Francisco, California (up 10 percent).

“The increase in foreclosure starts is not just a one-month anomaly in many local markets given that July represented the third consecutive month with a year-over-year increase in 33 metro areas, including Los Angeles, Miami, Houston, Detroit, San Diego and Austin,” said Daren Blomquist, senior vice president with ATTOM Data Solutions. Loosening of lending standards over the past year has driven up foreclosures. Lenders are coming up with creative ways to give out loans which, as a result, unintentionally makes it harder for financially-stretched buyers to prevent foreclosure.

Among the 219 metropolitan statistical areas with at least 200,000 people, the highest foreclosure rates in July were Atlantic City, New Jersey (one in every 448 housing units with a foreclosure filing); Peoria, Illinois (one in every 622); Fayetteville, North Carolina (one in every 683); Trenton, New Jersey (one in every 703); and Philadelphia (one in every 851).

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