10 States Where Foreclosed Homes Still Abound

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By Christine DiGangi

For the first time in several months, Florida does not have the nation's highest foreclosure rate. It's not even No. 2. It's fourth. Until last month, Florida had one of the top-three foreclosure rates since June 2012.

That's largely because the share of Florida homes in some state of foreclosure was down last month nearly 33% from August 2014, according to the monthly report on the U.S. residential foreclosure market from housing data company RealtyTrac. Nationwide, the share of homes with a foreclosure filing (default notices, scheduled auctions and bank repossessions) declined about 6% in August from the same time last year, but the number of homes entering the foreclosure process for the first time is at its lowest point since November 2005. One in every 1,205 U.S. housing units had a foreclosure filing in August.

In most states, the number of homes repossessed by banks has continued to increase for several months, which means there will be a larger pool of available properties in these markets in the coming months.

"This influx of bank-owned inventory may be good news for an inventory-challenged housing market, but buyers and investors interested in purchasing these bank-owned homes should understand they tend to be lower-value properties in areas where house values have not recovered as quickly and are more likely to have deferred maintenance issues that will need to be addressed," said Daren Blomquist, vice president at RealtyTrac, in a news release about the data.

Nationwide, such distressed properties are priced 33% below average market value, which could open up affordable options for aspiring homeowners. No matter the history of the home you might buy, affordability is largely dictated by your financial and credit situation, which is why it's so important to check your credit before you buy a home. (You can get a free credit report snapshot every month from Credit.com.)

Here are some states where foreclosed homes and, often, bank-owned homes are most common.

10. Ohio

August foreclosure rate: 1 in every 1,037

Change from July: down 10%

Change from 2014: down 19%

Annual change in bank-owned homes (REOs): up 35%

9. Indiana

August foreclosure rate: 1 in every 1,035

Change from July: down 6%

Change from 2014: down 14%

Annual change in REOs: up 53%

8. New Mexico

August foreclosure rate: 1 in every 1,005

Change from July: down 26%

Change from 2014: up 87%

Annual change in REOs: down 5%

7. North Carolina

August foreclosure rate: 1 in every 970

Change from July: none

Change from 2014: up 1%

Annual change in REOs: up 130%

6. Illinois

August foreclosure rate: 1 in every 921

Change from July: down 21%

Change from 2014: down 9%

Annual change in REOs: down 22%

5. South Carolina

August foreclosure rate: 1 in every 863

Change from July: up 7%

Change from 2014: up 11%

Annual change in REOs: up 5%

4. Florida

August foreclosure rate: 1 in every 596

Change from July: down 32%

Change from 2014: down 33%

Annual change in REOs: up 23%

3. New Jersey

August foreclosure rate: 1 in every 539

Change from July: down 4%

Change from 2014: up 3%

Annual change in REOs: up 295%

2. Maryland

August foreclosure rate: 1 in every 534

Change from July: down 4%

Change from 2014: none

Annual change in REOs: up 430%

1. Nevada

August foreclosure rate: 1 in every 507

Change from July: up 16%

Change from 2014: up 4%

Annual change in REOs: up 232%

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