US Foreclosure Starts Reach Seven-Year Low

US Foreclosure Starts Reach Seven-Year Low

Residential News » North America Residential News Edition | By Francys Vallecillo | October 10, 2013 9:24 AM ET

The number of foreclosure starts in the U.S. reached the lowest level in seven years during the third quarter, providing further evidence of a recovering housing market, according to latest data from RealtyTrac.

A total of 174,366 U.S. homes began the foreclosure process during the third quarter, a 13 percent drop from the previous quarter and 39 percent lower than last year, reaching its lowest point since the second quarter in 2006. 

Overall foreclosure activity during the third quarter was at its lowest quarterly level since 2007, due in large part to a decrease in the number of foreclosure filings in September, including default notices, scheduled auctions and bank repossessions, RealtyTrac reports. 

In September, 131,232 homes were the subject of foreclosure filings, a 2 percent increase from the previous month, but 27 percent lower than last year, marking the 36th consecutive month of annual decreases in U.S. foreclosure activity. 


Daren Blomquist

"The September and third quarter foreclosure numbers show a housing market that is haltingly returning to health," Daren Blomquist, vice president at RealtyTrac, said in the release. "While foreclosures are clearly becoming fewer and farther between in most markets, the increasing time it takes to foreclose is holding back a more robust and sustainable recovery.
 While the report offers signs of an overall housing market recovery, some markets are still struggling with foreclosure activity. 

Foreclosure activity dropped 8 percent in Florida during the third quarter after six quarters of annual increases, but the state's foreclosure rate still ranked highest in the nation during the third quarter. One in every 126 homes reported foreclosure filings during the quarter, more than twice the annual rate, the firm says.

Nevada's foreclosure activity increased 10 percent from the previous quarter and jumped 21 percent from last year, with the state's foreclosure rate ranking second in the nation.

"These spikes in activity demonstrate that while millions of distressed homeowners have been pulled back from the precipice by foreclosure prevention programs over the past several years, once those programs expire or are exhausted, a percentage of these troubled homeowners are still susceptible to falling into foreclosure," Mr. Blomquist said. "In addition even slight economic downturns at the local or regional level can push these homeowners hanging on by a thread over the edge."

More from the report:

  • Third quarter foreclosure starts decreased from a year ago in 38 states including Colorado (down 71 percent), Arizona (down 63 percent), California (down 59 percent), Illinois (down 56 percent), and Florida (down 52 percent).
  • Third quarter foreclosure starts increased from a year ago in 11 states, including Maryland (up 259 percent), Oregon (up 252 percent), New Jersey (up 53 percent), Connecticut (up 52 percent), Nevada (up 36 percent), and New York (up 25 percent).
  • Third quarter bank repossessions (REO) decreased 24 percent from a year ago but were up 7 percent from the previous quarter. A total of 119,485 U.S. properties were repossessed by lenders in the third quarter, putting the nation on pace for close to half a million total bank repossessions for the year.
  • The quarterly increase in REOs nationwide was driven by quarterly increases in 26 states, including New York (up 65 percent), New Jersey (up 64 percent), Illinois (up 44 percent), Virginia (up 36 percent), Connecticut (up 34 percent), Indiana (up 30 percent), Nevada (up 29 percent), and California (up 19 percent).
  • Overall foreclosure activity in September decreased from a year ago in 33 states, but was up from a year ago in 16 states, including Maryland (up 230 percent), Nevada (up 97 percent), Connecticut (up 69 percent), New Jersey (up 55 percent), Pennsylvania (up 34 percent), and New York (up 22 percent).
  • September foreclosure activity decreased from a year ago in 144 of the 209 metro areas tracked in the report (69 percent), but increased from a year ago in 64 metros (31 percent), including Baltimore (up 381 percent), Las Vegas (up 109 percent), Raleigh, N.C. (up 97 percent), Hartford, Conn., (up 74 percent), Washington D.C., (up 52 percent), Philadelphia (up 32 percent), and New York (up 25 percent).

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