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U.S. Foreclosure Activity Down to Lowest Levels Since 2006

U.S. Foreclosure Activity Down to Lowest Levels Since 2006

Residential News » North America Residential News Edition | By Michael Gerrity | July 17, 2014 9:20 AM ET



According to RealtyTrac's Midyear 2014 U.S. Foreclosure Market Report, a total of 613,874 U.S. properties with foreclosure filings - default notices, scheduled auctions and bank repossessions - occurred in the first half of 2014. This is a 19 percent decrease from the previous six months and down 23 percent from the first half of 2013. The report also shows that 0.47 percent of all U.S. housing units (one in 214) had at least one foreclosure filing in the first six months of the year.

Total foreclosure activity in June 2014 was the lowest since the housing bubble burst in August 2006 in 10 states, including Texas, Georgia, Colorado, Tennessee, Arizona and Nevada.

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Daren Blomquist

"Nationwide foreclosure activity in June reached an important milestone, dropping to levels not seen since before the housing price bubble burst in August 2006," said Daren Blomquist, vice president at RealtyTrac. "Over the next six to nine months nationwide foreclosure numbers should start to flat line at consistently historically normal levels.

"There continue to be concerning trends in some states and local markets that clearly indicate those markets are not completely out of the woods when it comes to the lingering foreclosure problem left over from the housing bust," Blomquist continued. "While it's important that any remaining foreclosure infection is addressed promptly to keep it from festering, foreclosures are no longer a widespread contagion threatening to derail the housing market's return to full health."

High-level findings from the RealtyTrac report:

  • Only nine states saw overall foreclosure activity increase in the first half of 2014 compared to a year ago, including New Jersey (up 54 percent), Maryland (up 18 percent), Iowa (up 10 percent), Massachusetts (up 4 percent), and Connecticut (up 4 percent).
  • States with the highest foreclosure rates in the first half of 2014 were Florida (one in 74 housing units with a foreclosure filing), Maryland (one in 107), Illinois (one in 123), New Jersey (one in 134), and Nevada (one in 138).
  • A total of 47,243 U.S. properties started the foreclosure process for the first time (not including re-filings) in June, down 4 percent from the previous month and down 18 percent from a year ago to the lowest level since November 2005 -- a more than 8 and a half year low.
  • Foreclosure starts in June increased from the previous month in 15 states and were up from a year ago in 20 states, including Massachusetts (105 percent increase), New Jersey (70 percent increase), Nevada (66 percent increase), Indiana (65 percent increase), Oregon (50 percent increase), and Ohio (17 percent increase).
  • Halfway through 2014, a total of 315,895 U.S. properties have started the foreclosure process, on pace to reach more than 630,000 for the year, which would be down from the 747,728 in 2013.
  • A total of 26,889 U.S. properties were repossessed by lenders via foreclosure in June, down 5 percent from the previous month and down 24 percent from a year ago to the lowest level since June 2007 -- an 84 month (7-year) low.
  • Lender repossessions in June increased from the previous month in 16 states and were up from a year ago in 12 states, including Iowa (up 86 percent), Maryland (up 86 percent), New York (up 49 percent), Oregon (up 22 percent), California (up 18 percent), Illinois (up 8 percent), and New Jersey (up 5 percent).
  • Halfway through the year a total of 174,691 U.S. properties have been repossessed by lenders via foreclosure, on pace to reach nearly 350,000 for the year, which would be down from the 462,970 lender repossessions in all of 2013.
  • A total of 46,743 U.S. properties were scheduled for foreclosure auction (in some states these are foreclosure starts) in June, down 1 percent from the previous month and down 13 percent from a year ago to the lowest level since July 2006 -- a 95-month low.
  • Scheduled foreclosure auctions increased from the previous month in 12 states and were up from a year ago in 17 states, including Connecticut (up 68 percent), Pennsylvania (up 62 percent),New Jersey (up 25 percent), North Carolina (up 15 percent), Florida (up 15 percent), and New York (up 10 percent).
  • For properties foreclosed in the second quarter of 2014, the average time to complete foreclosure was 577 days, up from 572 days in the previous quarter and up from 526 days in the second quarter of 2013.
  • States with the longest time to foreclose were New Jersey (1,098 days), New York (930 days), Florida (925 days), Hawaii (915 days), Illinois (850 days), and Massachusetts (784 days).

Florida, Maryland, Illinois post top state foreclosure rates in first half of 2014

The Florida foreclosure rate was the nation's highest in the first half of 2014: 1.35 percent of housing units with a foreclosure filing (one in 74) during the six-month period -- nearly three times the national average. A total of 121,412 Florida properties had a foreclosure filing in the first six months of the year, the most of any state but down 16 percent from the previous six months and down 22 percent from a year ago. In June, Florida foreclosure starts (LIS) and foreclosure completions (REO) were down from a year ago, but scheduled foreclosure auctions increased 15 percent from a year ago. Florida scheduled foreclosure auctions have increased annually in 16 of the last 18 months.

Maryland foreclosure activity in the first half of 2014 decreased 12 percent from the previous six months but was still up 18 percent from a year ago, helping boost the state's foreclosure rate to second highest in the nation: 0.93 percent of housing units with a foreclosure filing (one in 107) during the six-month period. In June Maryland foreclosure activity increased 7 percent from the previous month and was up 12 percent from a year ago, boosted by an 86 percent year-over-year increase in bank repossessions.

A total of 42,866 Illinois properties had a foreclosure filing in the first half of 2014, 0.81 percent of all housing units (one in every 123) -- the nation's third highest state foreclosure rate. The Illinois foreclosure rate ranked No. 3 in the first half of 2014 despite a 16 percent decrease in foreclosure activity from the previous six months and a 32 percent decrease in foreclosure activity from a year ago. Overall foreclosure activity in Illinois jumped 23 percent between May and June, but was still down 19 percent from a year ago driven by decreases in foreclosure starts and scheduled foreclosure auctions. Bank repossessions in Illinois in June increased 8 percent from a year ago, the third consecutive month with an annual increase.

A total of 26,467 New Jersey properties had a foreclosure filing in the first half of 2014, a 54 percent increase from a  year ago and 0.74 percent of all housing units (one in every 134) -- the nation's fourth highest state foreclosure rate.

A total of 8,504 Nevada properties had a foreclosure filing in the first half of 2014, a 48 percent decrease from a year ago and 0.73 percent of all housing units (one in every 138) -- the nation's fifth highest state foreclosure rate.

Other states with foreclosure rates ranking among the nation's 10 highest in the first six months of 2014 were Ohio (0.69 percent of all housing units with a foreclosure filing), Delaware (0.68 percent), Connecticut (0.66 percent), Indiana (0.63 percent), and South Carolina (0.62 percent).

79 percent of metros post decreasing foreclosure activity in first half of 2014

Of the 212 metropolitan statistical areas tracked in the report, 168 (79 percent) posted decreasing foreclosure activity compared to a year ago, with an average decrease of 32 percent.

Major metros with decreasing foreclosure activity in the first half of 2014 compared to a year ago included Los Angeles (down 20 percent), Chicago (down 30 percent), Dallas (down 28 percent), Houston (down 29 percent), and Miami (down 30 percent).

Meanwhile 44 metro areas bucked the national trend with increasing foreclosure activity from a year ago in the first half of 2014. Major metros with increasing foreclosure activity included New York (up 20 percent), Philadelphia (up 6 percent), Washington, D.C. (up 12 percent), and Baltimore (up 3 percent).

Despite the annual decrease, Miami posted the nation's highest metro foreclosure rate: 1.65 percent of all housing units (one in 61) with a foreclosure filing during the first half of the year. Eight other Florida metro areas joined Miami among the top 10 metro foreclosure rates nationwide: Orlando at No. 2 (1.57 percent of all housing units with a foreclosure filing); Port St. Lucie at No. 3 (1.49 percent); Palm Bay-Melbourne-Titusville at No. 4 (1.49 percent); Tampa-St. Petersburg at No. 5 (1.41 percent); Lakeland at No. 6 (1.35 percent); Deltona-Daytona Beach-Ormond Beach at No. 7 (1.29 percent); Ocala at No. 8 (1.26 percent); and Jacksonville at No. 9 (1.24 percent).

Of the Florida markets with top 10 foreclosure rates, all posted annual decreases in foreclosure activity except for Port St. Lucie (up 19 percent from a year ago), Lakeland (up 2 percent), and Deltona-Daytona Beach-Ormond Beach (up 21 percent).

The only metro area outside of Florida with a top 10 foreclosure rate in the first half of 2014 was Rockford, Il., where 1.24 percent of housing units (one in 81) had a foreclosure filing during the six-month period.

Foreclosure process lengthens nationwide, down from year ago in 17 states

U.S. properties foreclosed in the second quarter of 2014 were in the foreclosure process an average of 577 days from the initial public foreclosure notice to the completed foreclosure, up 10 percent from 526 days in the second quarter of 2013.

The average time to foreclose decreased from a year ago in 17 states, including Minnesota (down 20 percent), Texas (down 17 percent), Maryland (down 17 percent), Georgia (down 11 percent), New York (down 10 percent), and California (down 7 percent).

The average time to foreclose was 1,098 days in New Jersey, the longest of any state, followed by New York at 930 days, Florida at 925 days, Hawaii at 915 days, Illinois at 850 days, and Massachusetts at 784 days.

The average time to foreclose was 169 days in Delaware, the shortest of any state, followed by Texas at 173 days, Alaska at 185 days, Minnesota at 192 days, and Alabama at 207 days.

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