Measuring the impact of inflation on foreclosure activity in the US MN / Public News Service

In the first six months of this year, the United States saw a significant increase in foreclosure filings, coinciding with concerns about the pressure inflation is putting on homeowners.

A national tracking company recently reported nearly 165,000 US properties with foreclosure filings, more than double the same time last year. The rise follows the expiration of pandemic moratoriums and forbearance programs, but analysts say spikes in consumer costs aren’t helping.

Joe Mahon, regional outreach manager for the Federal Reserve Bank of Minneapolis, said it affects borrowers in different ways.

“It causes people to cut the more discretionary parts of their budget,” Mahon observed. “If you’re on a low income, you don’t necessarily have a lot of discretionary spending, so there’s not necessarily a lot of room to cut back.”

Mahon pointed out that even though salaries have risen sharply, they have not kept up with inflation, which reduces a person’s chances of getting caught up in budgetary issues, such as late payments.

Statewide, the Minnesota Homeownership Center has partnerships with nearly 20 organizations offering free financial counseling to avoid foreclosure.

While gasoline prices are trending lower, Mahon noted they are still higher than a year ago and homeowners could also be reeling from further energy price hikes. , including natural gas and the cost of heating their home.

“Unless we see a dramatic reversal in natural gas and fuel oil prices, expect higher heating costs this winter as well,” Mahon warned. “It’s one of those things you can only cut back on.”

When it comes to foreclosure filings, Minnesota is in the middle group of states for the first half of 2022, in which real estate data firm ATTOM said more than 2,100 properties in the state were in foreclosure.

Disclosure: The Minnesota Homeownership Center contributes to our fund for reporting on civic engagement, housing/homelessness, living wages/working families, and poverty issues. If you would like to help support news in the public interest, click here.

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