Home Foreclosures Fall to Lowest Level in Nearly 8 Years

home foreclosure realtytrac corelogic real estate economy mortgage crisis
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LOS ANGELES -- Fewer U.S. homes entered the foreclosure process or were repossessed by banks in June, the latest sign that the nation is shaking off its housing bust hangover.

Lenders initiated the foreclosure process on 57,286 homes last month, the lowest level for any month in 7½ years, foreclosure listing firm RealtyTrac Inc. said Thursday.

Foreclosure starts are on pace to reach roughly 800,000 this year, down from 1.1 million last year, the firm said.

Completed foreclosures, when the lender repossesses a home, are on track to hit a half-million, or about a quarter below last year's total.

The trend comes as the U.S. housing recovery continues to gain strength, propelled by steady job gains, low interest rates, improving consumer confidence and growing demand for homes at a time when there's a thin supply of available homes for sale in many markets.

That's helped boost home prices, which jumped 12.2 percent in May from a year earlier -- the biggest gain in seven years, according to data provider CoreLogic.

Even so, foreclosures remain a potential drag on housing in many states, including Florida, Nevada, Illinois and Ohio.

"Halfway through 2013, it is becoming increasingly evident that while foreclosures are no longer a national problem, they continue to be a state and local market problem," said Daren Blomquist, a vice president at RealtyTrac.

Homes scheduled for auction in states like Florida, where the courts play a role in the foreclosure process, were up 34 percent in June from a year earlier, the firm said.

Scheduled home auctions doubled last month in New Jersey and Florida, which also posted the highest foreclosure rate of any state -- nearly three times the national average -- in the first six months of the year, the firm said.

Most homes lined up for public auction typically end up going back to lenders, which opens the door for the properties to be placed on the market as sharply discounted foreclosed homes later this year or in 2013.

Nationally, the inventory of previously occupied homes on the market was 10 percent below prior-year levels in May, according to the National Association of Realtors. So the potential for more foreclosures going on sale will likely be welcome news to would-be homebuyers in markets where there is a tight supply of available homes.

The number of homes that entered the foreclosure process in June was down 21 percent from May and about 45 percent below June 2012's total.

Lenders repossessed 35,507 homes last month, down nearly 9 percent from May and a drop of 35 percent from a year earlier. That's still short of the 25,000 or so a month that Blomquist considers the benchmark for foreclosures in a "normal" housing market.

At the height of the housing boom in 2006, completed foreclosures averaged 22,000 a month. They peaked in September 2010 at 102,000. Tighter lending standards for home loans since the housing bubble burst have helped slow the pace of foreclosures.

About 75 percent of the 824,292 U.S. homes in the foreclosure process as of June are tied to loans that were originated between 2004 and 2008.

"That's a good sign that the lending has much improved and we're not seeing high foreclosure rates on mortgages that have been taken out since 2008," Blomquist said.

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I personally think that bankruptcy is much better than foreclosure. You seem to bounce back from bankruptcy a lot faster now days. They have secured credit cards and all kinds of ways to rebuild you credit. But foreclosure is more like an event that even with recovered credit, could keep you from buying another home.







July 13 2013 at 3:30 AM Report abuse rate up rate down Reply

Twentynine Palms, California is booming big time. A new casino was just built there. This place has the biggest Marine Base in the entire world. A lot of people are also moving to Twentynine Palms, CA everyday. The prices are also unbelievably very cheap (at least for now). An investor should look into building a mall, a movie theater, bowling alley, food courts, arcade, manufacturing, etc. in this area while it is still very affordable. You can own the business and the land/ real estate (no need to rent). I bought a land here for $25,000 along the Twentynine Palms highway and sold it in 2 days for $100,000 all-cash. I am surprised that the Chinese and Canadians have not discovered this very lucrative investment and it is in the best state (California).

July 12 2013 at 2:48 AM Report abuse +2 rate up rate down Reply

gee.......could IT BE DUE to the fact that foreclosure MODE AND METHOD/unqualified buyers
is just about OVER ?

July 11 2013 at 1:09 PM Report abuse -2 rate up rate down Reply

Foreclosures at lowest level in 8 years.. Looks like the banks (taxpayer $$$) have cornered the existing housing market on houses to sell. Soon we will see the existing home sales are up (banks getting rid of the Obama inventory)

July 11 2013 at 8:49 AM Report abuse -1 rate up rate down Reply