September 17th, 2013
The United States saw fewer foreclosures in August compared to the month and year prior, signaling further improvement in the national housing market. According to RealtyTrac’s U.S. Foreclosure Market Report, in August, foreclosures were filed on only 128,560 properties – a drop of 2 percent from July and 34 percent from the same time in 2012. This marks the 35th month in a row of year-over-year declines in foreclosure activity.
RealtyTrac analysts note that these optimistic statistics are largely due to a decrease in foreclosure starts in August. Overall, 55,775 properties started the foreclosure process that month, which is a 44-percent drop compared to the year prior. According to the report, it’s also the lowest number of starts since the end of 2005.
Walt Molony, spokesman for the National Association of Realtors, told Realtor Magazine that the shrinking foreclosure inventory is due to “an improving economy, greater job creation, and improved personal financial conditions.”
On the other hand, there were more bank repossessions in August compared to July – a growth of 6 percent.
“The foreclosure floodwaters have receded in most parts of the country, but lenders and communities continue to clean up the damage left behind, which means the recent uptick in bank repossessions is a trend that will likely continue into next year,” said Daren Blomquist, vice president of RealtyTrac. “Meanwhile, foreclosure flash floods will continue to hit some markets over the next few months as delayed foreclosure starts are quickly pushed into the pipeline. This was the case with the jump in Nevada foreclosure starts in August.”
Indeed, not all states had stellar numbers in RealtyTrac’s foreclosure report. Nevada saw a 226 percent increase in foreclosure starts in August compared to the month before. Starts also rose in 16 other states, including Ohio, Maryland and California.
Similarly, Nevada foreclosure activity as a whole shot up 104 percent in August, making it the state with the highest foreclosure rate that month. According to the RealtyTrac report, this jump is primarily a product of the major increase in foreclosure starts in the state.
In contrast, 38 states saw a drop in foreclosure starts. Surprisingly, these were both judicial and nonjudicial. In the past, judicial states have been faced with massive backlogs of foreclosure claims since they all have to go through the lengthy judicial process.
Colorado’s starts fell 80 percent and Arizona’s declined 65 percent, RealtyTrac reported.