With the moratorium in place, mortgage foreclosure activity decreased 83% year over year in July and 4% year over June, according to Attom Data Solutions.
This downward trend corresponds to the decline in the first half of 2020 of 44% compared to the same period of the previous year and of 54% compared to two years ago.
Attom's report found that a total of 8,892 housing units filed for foreclosure in July – roughly one in 15,337 U.S. homes – down from 51,056 units, or one in 2,652 a year ago.
RealtyTrac's executive vice president, Rick Sharga, said that this period of decline should come to an abrupt end as soon as federal and state moratoriums are lifted.
"It is inevitable that foreclosures will increase significantly after these moratoriums expire, although default rates are unlikely to reach the levels we saw during the Great Recession," Sharga said in the report.
At the state level, Delaware had the highest foreclosure rate with one of 6,489 properties. Next came one of 7,328 units in South Carolina, followed by one in 7,542 in Maine.
The foreclosure rate is higher when it is broken down by city. Of the 220 housing markets of more than 200,000 residents, Trenton, N.J. had a foreclosure rate of one in 3,445 units, followed by one of 3,833 in McAllen, Texas, and one in 4,038 in Davenport, Iowa.
With a population of more than 1 million, Louisville, Kentucky had a rate of one in 5,383 homes. Riverside, California followed in third place with one of 7,345 and Baltimore with one of 8,139 units.
Redemption by banks fell by 80% compared to the previous year and by 14% from June to a total of 2,163 properties.
"Even after standard activity begins to pick up, the number of withdrawals may not increase in a similar fashion," Sharga said. "The combination of record high homeowners, extremely limited supply of homes for sale and strong demand for home buyers should enable many distressed homeowners to sell their properties rather than lose them through foreclosure."
Despite the steep decline in July, foreclosure starts increased month-to-month by 54% in Connecticut, 42% in Michigan, 34% in Missouri, 32% in Virginia, and 1% in California. Among the subway areas of over 1 million residents, Los Angeles has the highest number of foreclosures with 285 in July, followed by 190 in New York, 182 in Chicago, 174 in Houston and 125 in Atlanta.