Mortgages

Foreclosures Continue to Drop

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The housing market has been improving by leaps and bounds for more than a year, and this growth has resulted in a steady decline in the number of foreclosures nationwide.

There were about 52,000 foreclosure actions completed nationwide in May, down approximately 27 percent from the 71,000 observed at the same time in 2012, according to the latest National Foreclosure Report from the industry tracking firm CoreLogic. However, it should be noted that this was also up 3.5 percent from April 2013, and is still more than double the average of about 21,000 per month seen between 2000 and 2006, prior to the national housing downturn. Since September 2008, about 4.4 million foreclosures have been finalized overall.

Meanwhile, though, the number of foreclosed homes on the market has also dropped, likely due to extremely high consumer demand for almost any type of property available, the report said. In all, there are now about 1 million homes nationwide in some stage of the foreclosure process, down 29 percent from the 1.4 million a year earlier, marking the 19th straight month of annual declines. Foreclosures now comprise about 2.6 percent of all homes nationwide, which is also down from 3.5 percent during that same time period.

“We continue to see a sharp drop in foreclosures around the country and with it a decrease in the size of the shadow inventory,” said Anand Nallathambi, the president and chief executive officer for CoreLogic. “Affordability, despite the rise in home prices over the past year, and consumer confidence are big contributors to these positive trends. We are particularly encouraged by the broad-based nature of the housing market recovery so far in 2013.”

Finally, when it comes to delinquency on outstanding mortgage balances, fewer than 2.3 million homes nationwide — or about 5.6 percent of the total number — were considered to be “seriously” behind on payments, the report said. Mark Fleming, the chief economist for CoreLogic, said this is now the lowest point seen since December 2008, and 42 states have seen double-digit declines in serious delinquency.

Foreclosures also tend to depress home values in general, so as these properties are scooped up, they may also allow current homeowners who are dealing with negative equity to be released from the problem more quickly.

Image: iStockphoto

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