South Carolina leads nation in foreclosure activity, but experts say context matters

COLUMBIA, S.C. (WIS) - South Carolina continues to lead the nation in foreclosure activity, according to new data from ATTOM Data Solutions.

The report found the state recorded 1,579 foreclosure filings in August, or about one filing for every 1,547 housing units, giving South Carolina the highest foreclosure rate in the country. The figure represents a 41% increase from the same month a year ago.

The report also identified Dorchester County, Kershaw County, Chester County and Florence County as among the state’s foreclosure hotspots.

Despite the increase in filings, officials with the South Carolina Housing Finance and Development Authority say housing affordability remains one of the biggest challenges facing prospective homebuyers.

The agency says it has seen increased demand for programs that offer lower interest rates and forgivable down payment assistance as South Carolinians continue to navigate higher home prices and mortgage rates.

“It shows that the demand is coming at a time when home prices and mortgage rates continue to create significant barriers for many prospective buyers, so these things are very much in demand and very much helpful for homebuyers that need that sort of assistance,” said Matt McColl, marketing and public information director for SC Housing.

SC Housing officials say the agency has also set records in recent years for homebuyer assistance and loan volume.

“The mortgages themselves, the amount of assistance we provided, that accounted for $703 million in loan volume, which was also a large increase, 51% from the previous fiscal year,” McColl said.

However, the state’s foreclosure ranking is being interpreted differently by some housing experts.

According to the South Carolina Realtors association, the rise in foreclosure filings does not necessarily signal a repeat of the housing crisis that fueled the Great Recession. The group argues foreclosure activity was artificially suppressed during the pandemic because of federal and state foreclosure moratoriums and other homeowner protections.

The association says today’s housing market is fundamentally different from the conditions that led to the 2008 housing crash, pointing to stricter lending standards, a higher share of fixed-rate mortgages and stronger homeowner equity positions. Realtors argue current foreclosure activity is closer to a return to pre-pandemic levels than evidence of a systemic housing market problem.

“People naturally hear ‘foreclosures’ and have flashbacks to the Great Recession in 2008, but the current landscape is completely different. In 2008, we had a systemic crisis driven by subprime lending, and homeowners were drastically underwater. Today, lending standards are incredibly strict. We are nowhere near the 2008 numbers, and we don’t have the fundamental flaws in the market that caused them,” said Nick Kremydas, the CEO of SC Relators.

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