Foreclosure activity falls as housing recovers
Completed foreclosures fall 25% from last year
Completed foreclosures in the U.S. fell 25% year-over-year in July, according to the latest data from CoreLogic (CLGX). July’s completed foreclosures totaled 49,000, down from 65,000 actions in July 2012.
On a monthly basis, completed foreclosures fell 8.6% from the 53,000 actions reported a month earlier.
Before the fall of the housing market in 2007, completed foreclosures averaged 21,000 per month throughout the country between 2000 and 2006. Since the start of the financial crisis in September 2008, there have been an estimated 4.5 million completed foreclosures nationwide.
In the first seven months of this year, approximately 949,000 homes in the U.S. were in some stage of foreclosure, deemed the foreclosure inventory. This compares to 4.1 million units in July 2012, a 32% year-over-year drop.
From June to July, the foreclosure inventory was down 4.4%. In July, the foreclosure inventory made up 2.4% of all homes with a mortgage, which compares to 3.4% in July 2012.
Mark Fleming, chief economist for CoreLogic, noted that as the housing market continues to recover, the foreclosure inventory is declining quickly, down 32% from a year ago. "Continued strength in the housing market will contribute to our outlook for ongoing improvement in the stock of distressed assets through the end of this year."
"Completed foreclosures and delinquency rates continued their rapid descent in July. Every state posted a year-over-year decline in foreclosures and serious delinquencies fell to the lowest level since December 2008," said Anand Nallathambi, president and CEO of CoreLogic.
"Not surprisingly, non-judicial states have come the farthest the fastest in reducing shadow inventory and lowering delinquency rates," Nallathambi added.
The five states with the highest number of completed foreclosures year-over-year in July 2013 were Florida, California, Michigan, Texas and Georgia. These five states accounted for nearly half of all completed foreclosures nationally.
The five states with the lowest number of completed foreclosures for the 12 months that ended in July 2013 were the District of Columbia, North Dakota, West Virginia, Hawaii and Maine.
Surprisingly, as completed foreclosures fell, short sales are on the rise. According to the latest report from RealtyTrac, short sales accounted for 14% of all residential sales in July, a 13% increase from June and a 9% rise year-over-year. Nevada, Florida, Maryland, Washington and Tennessee were the states with the highest percentage of short sales in July.
According to Craig King, COO of Chase International, the increase in completed short sales in July is a result of the frenzied buying pace during the first few months of the year when the seasonal activity increased tremendously.
“With almost 40% of homeowners in the Reno-Sparks area still underwater on their mortgages we should continue to see some short sales but overall the number of new short sales coming on the market is declining as we return to a normalizing market place and a return of equity sales,” he said.